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Polytechnic State University Sanluis Jan-2006 - Nov-2010
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Category > Business & FinancePosted 24 May 2017My Price10.00
A project costs $2.5 million up front and will generate cash flows in perpetuity
A project costs $2.5 million up front and will generate cash flows in perpetuity of $240,000. The firm’s cost of capital is 9%. a. Calculate the project’s NPV. b. Calculate the annual EVA in a typical year. c. Calculate the overall project EVA and compare to your answer in part a.