Charles Motor Company makes electric cars and has two products, the General and the Extreme. To produce the General, Charles Motor employed assets of $23,500,000 at the beginning of the period and $30,000,000 of assets at the end of the period.

General administration and selling costs total $1,777,000 for the period. In the current period, Charles Motor produced 8000 General cars using 7,000 setup-hours and 176,500 machine-hours. Charles Motor sold these cars for $14,000 each. Residual income for General is $ 6,755,500 and required rate of return 15%. Charles Motor defines investment as average assets during the period.

Assuming that Charles Motors total assets are $30,000,000, current liabilities $2,500,000, tax rate is 40% and weighted average cost of capital (WACC) 8%.

What is Economic Value Added (EVA) for the General?

Select one:

a. Cannot be determined from the data given

b. NONE OF THE GIVEN OPTIONS

c. $4,060,800

d. $8,368,000

e. $8,568,000

f. $4,260,800