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b. Within your company above, the Human Resources Division has $2,500,000 in total assets, which is the total capital employed by this division. The tax
b. Within your company above, the Human Resources Division has $2,500,000 in total assets, which is the total capital employed by this division. The tax rate is 30% and the Earnings Before Interest and Tax (EBIT) of Human Resources is $800,000. What is the Economic Value Added (EVA) for the Human Resources Division?
*FYI: Cost of Debt = 7.14% (1-.30) = 5.0%
I need to know the steps for the answers for me to understand. Please, and thank you.
Note: In question a., we had to find the WACC, and I don't know if its relevant, but the WACC is 7.8%
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