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A company has $25mln worth of capital, and a cost of capital of 15%. Its profit after taxes for the current year was $4mln. In

A company has $25mln worth of capital, and a cost of capital of 15%. Its profit after taxes for the current year was $4mln. In order to calculate the Economic Value Add, the company has adjusted its profit to $5mln and its capital to $26mln. What is the EVA?

100,000 (4m 0.15 * 26m)

1.1m (5m 0.15 * 26m)

1.25m (5m 0.15 * 25m)

5m

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