Question
I need to find VRL's economic value added in the 2018/2019 financial year and compare it with the previous year. EVA = NOPAT - Invested
I need to find VRL's economic value added in the 2018/2019 financial year and compare it with the previous year. EVA = NOPAT - Invested capital * WACC
NOPAT = 38.12 million
Invested Capital = 952.15 million
WACC = -3.7%
Therefore,
EVA = 38.12 - 952.15 * -0.037
EVA = 73.35 million
This is the answer I have found however I don't understand what this 73.35 million means?? Why is the number increasing shareholder wealth when the WACC is negative?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Income Tax Fundamentals 2013
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
31st Edition
9781285586618
