Question
Assume Division 1 of the XYZ Company had the following results last year. Sales $5,000,000 Operating income 1,000,000 Total assets (average) 10,000,000 Current liabilities 500,000
Assume Division 1 of the XYZ Company had the following results last year.
Sales $5,000,000
Operating income 1,000,000
Total assets (average) 10,000,000
Current liabilities 500,000
Management's required rate of return is 8% and the weighted average cost of capital is 6%. Its effective tax rate is 30%. What is the division's economic value added?
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A Guide To Effective Internal Management System Audits Implementing Internal Audits As A Risk Management Tool
Authors: IT Governance Publishing
1st Edition
1849285594, 978-1849285599
