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No cash flows are forecast after year 2 and the equipment will have no salvage value The cost of capital is 10% What is the project’s

No cash flows are forecast after year 2, and the equipment will have no salvage value. The cost of capital is 10%.
a. What is the project’s NPV?

b. Calculate the expected EVA and the return on investment in each of years 1 and 2.
c. Why does EVA decline between years 1 and 2, whereas the return on investment is unchanged?
d. Calculate the present value of the economic value added. How does this figure compare with the project NPV?

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