Compute the economic value added

Assignment Help Finance Basics
Reference no: EM131086479

You are considering an investment in an everlasting gobstopper machine. This machine will cost $10 million and will produce cash flows of $1 million and the end of every year forever. The appropriate cost of capital is 8%. Compute the economic value added (EVA) for this project. The PV of the EVAs for this project is.

Reference no: EM131086479

Questions Cloud

Write a program to generate a four-tone siren : Write a program to generate a four-tone siren
What is the bond nominal yield to call : The bond has a 6.50% nominal yield to maturity, but it can be called in 6 years at a price of $1,195. What is the bond's nominal yield to call?
Write instructions to perform the following operation : Write instructions to perform the following operation
What is stock current price : a) What is the stock's expected price four years from now, i.e P4=? b) What is stock's current price?
Compute the economic value added : This machine will cost $10 million and will produce cash flows of $1 million and the end of every year forever. The appropriate cost of capital is 8%. Compute the economic value added (EVA) for this project. The PV of the EVAs for this project i..
How should heather record and measure such a liability : An employee not taking his/her earned sick days would recveive payment thereon December 31 of that year. How should Heather record and measure such a liability as of June 30th?
Evaluate the pros and cons of outcomes : Evaluate each of these alternatives. On the basis of the limited information presented, recommend the one you feel is best. If Casinos International's stock price rises to $60, what will happen under alternatives 2 and 3? Evaluate the pros and cons ..
Computing the residual value : Diamond Autobody purchased some new equipment. The new equipment cost $90,000. The company estimates the equipment will have a residual value of $10,000. Diamond also estimates it will use the equipment for eight years or about 5,000 total hours.
How you could use residency experience to further research : If you are planning on attending an academic residency this quarter or next quarter, explain how you could use the residency experience to further your research.

Reviews

Write a Review

Finance Basics Questions & Answers

  Use the following information and the dupont identity to

use the following information and the dupont identity to solve for profit margin net income 69000total asset turnover

  Values of bonds for given interest rates

What would be the value of this bond if interest rates fall to 5% the day after it is purchased? If interest rates fell to 5% after one year, what would the bond be worth at that point?

  Develop a proposal that includes a financial breakdown

You need to develop a proposal that includes a financial breakdown of startup costs and projected income and expenses for five years

  Cmpute the present value of 100 cash flow for the

compute the present value of 100 cash flow for the following combinations of discout rates and timesr8 tyearsr8 t20

  Analyst report on a public listed dividend paying company

Objective: To prepare an analyst report on a public listed dividend paying company. Risk-return analysis- What are the risks of this company? (Where is this risk coming from (market, firm, industry or currency)? How is the risk profile of the compa..

  What are the net payments of carter and brence

Would Carter be better off if it issued floating-rate debt and engaged in the swap? Would Brence be better off if it issued floating-rate debt or if it issued fixed-rate debt and engaged in the swap?

  Calculate percent change in price

Market, Inc. has a 7 year, 6% annual coupon bond outstanding with a $1,000 par value. The bond has a yield to maturity of 5.5%.

  A fund has expected risk premium of 8 and an expected sd of

a fund has expected risk premium of 8 and an expected sd of 20. t-bill is 3. utility function is uer-2.5sd2. what

  Question regarding the money management

Most money managers have a portion of their compensation tied to the performance of the portfolios they manage. Explain how this arrangement can create an ethical dilemma for the manager and suggest a way to ensure ethical behavior.

  Determine g by rearranging the conventional ddm formula

Determine g by Rearranging the Conventional DDM Formula. Johnson Corporation's stock is currently selling at $45.83 per share. The last dividend paid was D0 = $2.50.

  Consider the role of simulation analysis and decision trees

Consider the role of simulation analysis and decision trees in capital budgeting risk analysis.    Describe   the advantages offered by each technique.  Describe a scenario that the technique would be appropriate to apply to and explain what you woul..

  Maintain a productive and positive working environment

Promoting individual development and working to maintain a productive and positive working environment are vital. However, these are not the only functions of HR. Write a paper in which you identify other important HR functions and analyze how you..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd