Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Castle Products recently reported the following information: Net income = $680,000. - Sales $8,100,000. Tax rate=40%. Interest expense = $400,000. Total investor-supplied operating capital

image text in transcribed

Castle Products recently reported the following information: Net income = $680,000. - Sales $8,100,000. Tax rate=40%. Interest expense = $400,000. Total investor-supplied operating capital employed = $7.1 million. After-tax cost of capital = 11%. What is the company's EVA? a. $139,000 b. $3,839,000 c. $520,000 EBIT 1533333.33 -I (400,000) EBT 1133333 X (1-T) (1-40) Ni 680,000 d. $297,000 e. $2,142,000 Capiti Accurals)] (WACC) EVA-EBIT (1-T) { toti capil - (A/P-+ Acc 1,533,333 (1-40)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Quantitative Analysis for Management

Authors: Barry Render, Ralph M. Stair, Michael E. Hanna, Trevor S. Ha

12th edition

133507335, 978-0133507331

More Books

Students also viewed these Finance questions

Question

Refer to Example 10.18 and find a 90% confidence interval for /0.

Answered: 1 week ago