What is the total dollar amount of funds

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JVC Private Limited is a firm with $400,000 equity capital and $200,000 debt capital. It is considering an investment opportunity that will provide a net operating profit after-tax (NOPAT) of $248,000. Assume that the corporate tax rate is 25% and the firm's after-tax weighted average cost of capital (WACC) is 18%.

i. What is the total dollar amount of funds (capital) employed by the firm?

ii. Calculate the firm's Economic Value Added (EVA) and explain if the firm should accept of reject this investment opportunity.

Reference no: EM132288935

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