Jessica began a day care business three years ago and has worked hard to make it successful. She originally invested $4,000 of her own money and borrowed $10,000 from the bank to start her business. She has two employees and pays herself a management salary. She hopes to make a return on her $4,000 investment. With some help from her financial advisor, she determined that her expected rate of return on her investment combined with the rate of interest on her bank loan results in a weighted average cost of capital of 20%. The effective income tax rate on her business is 25%. She had $15,400 in operating income before interest and taxes this year. Her financial advisor helped her draw up the following balance sheet at the end of the year:

Compute the Economic Value Added (EVA®) for Jessi's DayCare.

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Jessi's Day Care Year-End Balance Sheet Wages payable Bank loan Cash Supplies Accounts receivable Total current assets $ 800 10,000 S 2,000 2,250 $ 5,750 12,550 Total liabilities Capital contribution Retained earnings Total liabilities and equity S10,800 4,000 3,500 Equipment Total assets $18,300 $18,300