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 sold2,100,000

Gross margin$1,900,000

Selling and administrative expense1,100,000

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. Barnard's actual cost of capital is 12%.

Calculate the EVA for Barnard Manufacturing.

$