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Assume division 1 of the XYZ Company has the following results last year (in thousands). Managements required rate of return is 8% and the weighted
Assume division 1 of the XYZ Company has the following results last year (in thousands). Managements required rate of return is 8% and the weighted average cost of capital is 6%. Its effective tax rate is 30%. Sales 5,000,000
Operating Expense 1,000,000
Total Assets 10,000,000
Current Liabilities 500,000
What is the divisions economic value added?
A. 60,000
B. 130,000
C. 270,000
D. 430,000
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