Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

In your internship, the financial manager of ABC firm, specialized in production and commercialization of car batteries, asks you to evaluate whether the firm creates

image text in transcribed
In your internship, the financial manager of "ABC" firm, specialized in production and commercialization of car batteries, asks you to evaluate whether the firm creates value to its shareholders. The cost of capital is 10%. Sales $700,000; Cost of Goods Sold (COGS) $250,000; SG&A Expenses $10,000; Depreciation $50,000; Other Operating Expenses $10,000; Financial charges $2,000. The total invested capital is $ 750,000. Corporate Tax rate is 40%. 1. Calculate the net operating profit after taxes (NOPAT).(2 points) 2- Calculate the company's Economic value added (EVA). Interpret. (2 points) 3- If the future EVAs are expected to grow at a constant growth rate 12% for the next three years, calculate the market value added (MVA). Interpret. (3 points)

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

International Financial Management

Authors: Cheol S. Eun, Bruce G.Resnick

6th Edition

71316973, 978-0071316972, 78034655, 978-0078034657

More Books

Students also viewed these Finance questions

Question

3. How did the researchers measure interpersonal distance?

Answered: 1 week ago