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Calculating Economic Value Added Barnard Manufacturing earned operating income last year as shown in the following income statement: Sales $4,000,000 Cost of goods sold 2,100,000

Calculating Economic Value Added Barnard Manufacturing earned operating income last year as shown in the following income statement:

Sales $4,000,000
Cost of goods sold 2,100,000
Gross margin $1,900,000
Selling and administrative expense 1,100,000
Operating income $800,000
Less: Income taxes (@ 40%) 320,000
Net income $480,000

At the beginning of the year, the value of operating assets was $2,700,000. At the end of the year, the value of operating assets was $2,300,000. Total capital employed equaled $1,400,000. Barnards actual cost of capital is 12%. Required: Calculate the EVA for Barnard Manufacturing.

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