A) Calculate EBIDTA, EBIT, EBIAT, and accounting net income for the .docx

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a) Calculate EBIDTA, EBIT, EBIAT, and accounting net income for the existing business for 2007- 2011. Then calculate the amounts by which these values would change if the new technology were adopted. b) A highly caffeinated divisional executive of the chain calls you and suggests that he has already worked out the NPV of the project. He says that he discounted 2007-2011 accounting net income that would result from the project and that this value was highly positive. Therefore, he sees no reason to hesitate in proceeding with the project. Explain what is wrong with this reasoning. (Do not bother to replicate his calculations.) c) An even more caffeinated divisional executive of the chain calls you a few minutes later and says that she also found that the NPV of the project is highly positive. She says that she discounted 2006-2011 free cash flows from the firm as a whole including the flows from the new project and that this value was highly positive. Therefore, she insists that they should immediately proceed with the project. Explain
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  • Fall '19
  • Income Statement, Operating cash flow, Generally Accepted Accounting Principles

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