Ocean is a small but profitable shipping company. The company's net operating profit has averaged...
50.1K
Verified Solution
Link Copied!
Question
Finance
Ocean is a small but profitable shipping company. The company's net operating profit has averaged around $25 million. Ocean's assets value is close to 120 million. Suppose that the company's cost of capital is 18%. The company is exempted from taxes. a) What is EVA (Economic value added)? b) Interpret the result in a) c) What is the company's return on assets? Assume that the company is in business forever. The cash flows every year are assumed to equal the net operating profit. d) What is the net present value of the company? e) Comment on the results in a), c) and d)
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Zin AI - Your personal assistant for all your inquiries!
