Question
A firm has a positive economic value added (EVA) of $500 (all amounts in thousands), long-term debt of $20,000, equity of $40,000, a weighted average
A firm has a positive economic value added (EVA) of $500 (all amounts in thousands), long-term debt of $20,000, equity of $40,000, a weighted average cost of capital (WACC) of 9% and a marginal tax rate of 32%. What is this organization's earnings before interest and taxes (EBIT)?
a.$4,012
b.$5,900
c.$8,676
d.$18,438
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Accounting for Governmental and Nonprofit Entities
Authors: Jacqueline L. Reck, James E. Rooks, Suzanne Lowensohn, Daniel Neely
18th edition
1260190080, 1260190083, 978-1259917059
