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Will increasing invested capital to take advantage of projects with positive NPV increase EVA or NOPAT?

April 16, 2017

Yes, both.

Increasing invested capital to take advantage of positive NPV projects will increase NOPAT and the dollar cost of capital $WACC. Because NPV is positive the increase in NOPAT will be larger than the increase in $WACC so EVA will increase.

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From → Asset Valuation

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