For the current year, Mo-Z Manufacturing estimates that its Return on Invested Capital (ROIC) is 9% and its Weighted Ave
Posted: Wed Mar 09, 2022 8:43 am
For the current year, Mo-Z
Manufacturing estimates that its Return on Invested Capital (ROIC)
is 9% and its Weighted Average Cost of Capital (WACC) is 11%. (6
points each)
a. Do you expect Mo-Z’s Economic Value
Added (EVA) to be positive or negative or is it
ambiguous? Explain.
b. Do you expect Mo-Z’s Market Value
Added (MVA) to be positive or negative or is it
ambiguous? Explain.
c. Is the proper focus of management
EVA, MVA, profit, growth, or some other
measure? Explain.
Manufacturing estimates that its Return on Invested Capital (ROIC)
is 9% and its Weighted Average Cost of Capital (WACC) is 11%. (6
points each)
a. Do you expect Mo-Z’s Economic Value
Added (EVA) to be positive or negative or is it
ambiguous? Explain.
b. Do you expect Mo-Z’s Market Value
Added (MVA) to be positive or negative or is it
ambiguous? Explain.
c. Is the proper focus of management
EVA, MVA, profit, growth, or some other
measure? Explain.