Please explain the logic behind this… The present value of future economic profit will be the same as NPV found by discounted cash flow anlysis in the basic capital budgeting approach if the WACC is used as the economic profit discount rate.
anyone?
where is that sentence from? sounds like the CFs in the capital budgeting = economic profit, so if you use the WACC as the discount rate, your numberator and denominator is the same whether you are using econ profit or CFs from cap budgeting