$1.$ Scranton Shipyards has $$24$ million in total net operating capital. The company's WACC is $11$ percent. What is Scranton's EVA? If negative, use the negative sign instead of parentheses, e$.$g$.-130,000.$

The company has the following income statement:

Sales

$$10\mathrm{.}0$ million

Operating costs

$6\mathrm{.}0$ million

Operating income $($EBIT$)$

$ $4\mathrm{.}0$ million

Interest expense

$2\mathrm{.}0$ million

Earnings before taxes $($EBT$)$

$ $2\mathrm{.}0$ million

Taxes $(40\%)$

$0\mathrm{.}8$ million

Net income

$ $1\mathrm{.}2$ million

Your Answer:

$2.$ New Mexico Lumber recently reported that its earnings per share were $$2\mathrm{.}5.$ The company has $400,000$ shares of stock outstanding. The company's interest expense was $$500,000.$ The corporate tax rate is $30$ percent. What was the company's operating income $($EBIT$)?$ If necessary, round it to a whole dollar.