How does increasing invested capital increase NOPAT and the dollar cost of capital ($WACC)? The answer key says “because NPV is positve, the increase in NOPAT will be larger than the increase in $WACC, so EVA will increase” The LOS says SS8, LOS 24d which is dvd and share repurchase so that is not explaining much, the other LOS listed is SS12 LOS 36 a. but Schweser has only formulas in that LOS.
Anyone care to explain? Thanks in advance