Lecitre 4

Question 1

What is the net ROI formula?

Answer 1

ROI (return on investment)
=book ROI-cost of capital
book ROI= after tax income/ net depreciation BV assets

Question 2

What is the formula for Eva?

Answer 2

EVA= income earned- income required

Income request= investment after tax x cost of capital

Question 3

What is the economic profitability formula? (2 types)

Answer 3

Economic income= cash flow + change in PV (PV1-PV0)

Economic income= cash flow- economic deep (pv0-pv1)