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Here are data on two firms: Equity ($ million) Debt ($ million) ROC (%) Cost of...

Here are data on two firms:

Equity
($ million)		 Debt
($ million)		 ROC
(%)		 Cost of Capital
(%)
Acme 160 80 17 12
Apex 470 180 15 13


a-1. Calculate the higher economic value added? (Do not round intermediate calculations. Enter your answers in millions)

Acme Apex
Higher economic value added $  million $  million

a-2. Which firm has the higher economic value added?

Acme has higher economic value added
Apex has higher economic value added


b-1. Calculate the higher economic value added per dollar of invested capital? (Do not round intermediate calculations. Round your answers to 2 decimal places.)

Acme Apex
Higher economic value added $ $

b-2. Which has higher economic value added per dollar of invested capital?

Acme has higher economic value added per dollar of invested capital
Apex has higher economic value added per dollar of invested capital

Solutions

Expert Solution

jeff jeffy answered 3 months ago
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