Calculate the required return (weighted average cost of capital) Market WeightsComponent Weighted Values CostCost Debt Equity Required return (weighted average cost of capital)................................... Calculate the Economic Profit (Economic Value Added)

Year2016201720182019202020212022Net Operating Assets$ 172,464 $ 168,070 $ 180,902 $ 183,766 $ 195,329 $ 206,491 $ 211,641 times the required return Required income in dollars Year2016201720182019202020212022Operating Income earned$ 8,686 $ 8,661 $ 4,445 $ 5,481 $ 6,634 $ 9,324 $ 10,314 Less required income Economic profit or (loss) Another way to look at this: Return on invested capital 5.04%5.15%2.46%2.98%3.40%4.52%4.87%Weighted average cost of capital Spread