FSP Corporation announced a net income of $2 million after deducting all expenses that includes an interest expense amounting to $400,000. Tax rate is 30%. The firm acquired additional long-term asset amounting to $800,000. The firm’s WACC is 12%. The economic value added of the firm would be? SRP Corporation announced a net income of $5 million after deducting all expenses that includes an interest expense amounting to $800,000. Tax rate is 30%. The firm acquired additional long-term asset amounting to $1,500,000. The firm’s WACC is 18%. The economic value added of the firm would be?

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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  1. FSP Corporation announced a net income of $2 million after deducting all expenses that includes an interest expense amounting to $400,000. Tax rate is 30%. The firm acquired additional long-term asset amounting to $800,000. The firm’s WACC is 12%. The economic value added of the firm would be?
  2. SRP Corporation announced a net income of $5 million after deducting all expenses that includes an interest expense amounting to $800,000. Tax rate is 30%. The firm acquired additional long-term asset amounting to $1,500,000. The firm’s WACC is 18%. The economic value added of the firm would be?
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