Herbal Resources is a small but profitable producer of dietary supplements for pets. This is...
70.2K
Verified Solution
Link Copied!
Question
Finance
Herbal Resources is a small but profitable producer of dietary supplements for pets. This is not a high-tech business, but Herbal's earnings have averaged around $2 million after tax, largely on the strength of its patented enzyme for making cats nonallergenic. The patent has eight years to run, and Herbal has been offered $3.2 million for the patent rights. Herbal's assets include $2.8 million of working capital and $9.6 million of property, plant, and equipment. The patent is not shown on Herbal's books. Suppose Herbal's cost of capital is 15%. What is its EVA? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations. Enter your answer in millions rounded to 3 decimal places.)
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: Flex AI - Your personal assistant for all your inquiries!
