EVA & MIRR calculations from June 2012

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    ofit
    Participant
    • Topics: 2
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    Hello,

    My question relates to June 2012.

    When calculating the NOPAT of 183,626 i.e. EBIT of 262,322 less 30% tax = 183,626.
    Why is it that the interest element does’nt come into play when adjusting the NOPAT figure (i.e. interest of Capital 600,000 less 250,000 equity owners = 350,000 x 8.4% = 29,400)?

    Also, can anyone forward on an easier solution to calculating the MIRR from June’12 paper?

    Thanks


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    ferrischan
    Participant
    • Topics: 5
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    Hi, we do not take in the interest element as it is the whole 600k that is the capital employed (regardless how is the structure of the capital) * WACC. Hope that is clear.

    As to the MIRR, how come they do not take in the cost of capital? and when they do the PV of Investment and Returns, how come they are using 4.5%?

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