Question
Drew Concrete uses Economic Value Added as a financial performance measure. Drew has $ 230 million in assets, and the firm has financed its assets
Drew Concrete uses Economic Value Added as a financial performance measure. Drew has $ 230 million in assets, and the firm has financed its assets with 30% equity and 70% debt with an interest rate of 6%. The firm's opportunity cost on its funds is 14%, while the operating return on the firm's assets is 11 %. a. What is the Economic Value Added created or destroyed by Drew Concrete? b. What does Economic Value Added measure? a. What is the Economic Value Added (EVA) created or destroyed by Drew Concrete? Enter a positive number for EVA created or a negative number for EVA destroyed. $ nothing million(Round to one decimal place.) b. What does Economic Value Added measure?(Select the best choice below.) A. Economic Value Added (EVA) measures the rate of return earned on the common stockholders' investment. B. Economic Value Added (EVA) measures a firm's ability to meet its interest payments from its annual operating earnings. C. Economic Value Added (EVA) provides an approach to evaluate a firm's performance in terms of shareholder value creation. D. Economic Value Added (EVA) provides an approach to indicate the rate of return earned on the firm's assets.
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