Sir in this question, for calculating the MVA from 2 nd year onwards we directly used the EVA2(1+g) =EVA3 , but if we had calculated EVA 3 by the std. Formula of NOPAT-(CE*Kc) i.e EVA3= 16(1+g) – 1.1cr*8.42% ,would that have been wrong method of doing the sum?
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Here explicit forecast period is 2 years. So u cannot do it the way suggested…in that case u are making only nopat grow by that percentage whereas the entire eva for 3rd year should reflect that growth