Answer:
The economic value establish in this case is $450
Explanation:
Economic value is the term which is defined as the computation of the profits an asset has either manufactured or might produce in the future. It is that measure of the product or service benefit provide the economic agent.
For computing the economic value as:
EV (Economic value) = (Actual rate of return - Cost of Capital) × Net Investment
where
Actual rate of return is $800
Cost of capital is $350
Net Investment is nil
Putting the values above:
EV = $800 - $350
EV = $450
