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- /5 MI! View Policies Current Attempt in Progress Paula Boothe president of the Flint...

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- /5 MI! View Policies Current Attempt in Progress Paula Boothe president of the Flint Corporation, has mandated a minimum 8% return on investment for any project undertaken by the company. Given the company's decentralization, Paula leaves all investment decisions to the divisional managers as long as they anticipate a minimum rate of return of at least 10%. The Energy Drinks division, under the direction of manager Martin Koch, has achieved a 13% return on investment for the past three years. This year is not expected to be different from the past three. Koch has just received a proposal to invest $1,812,000 in a new line of energy drinks that is expected to generate $329,000 in operating income Assume that Flint Corporation's actual weighted average cost of capital is 9% and its tax rate is 30%. (a) Calculate the economic value added of the proposed new line of energy drinks.(of the economic value added is negative then enter with a negative sign preceding the number cs. -5,125 or parenthesis,es (5,125). Round answer to decimal places, e.g. 5.125.) Economic value added $ e Textbook and Media Attempts: 0 of 3 used Submit Answer Save for Later

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