Question
Problem #2 The MistleToe Corporation sells Christmas decorations. They had the following financial information for 2019: Pre-Tax Operating Profit $6,000,000 Total Capital employed $12,000,000 Amount
Problem #2
The MistleToe Corporation sells Christmas decorations. They had the following financial information for 2019:
| Pre-Tax Operating Profit |
| $6,000,000 |
| Total Capital employed |
| $12,000,000 |
| Amount of Debt |
| $8,000,000 |
| MV of Equity |
| $4,000,000 |
| Pre-tax cost of debt |
| 12% |
| Securities premium over risk-free rate |
| 9% |
| Risk-Free rate |
| 6% |
| Tax rate |
| 35% |
The MistleToe Corporation has decided to implement an EVA bonus plan for its top executives.
Required: Calculate the Economic Value Added (EVA) to the corporation in 2019.
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How To Audit The Process Based QMS
Authors: Arter, Dennis R., Cianfrani, Charles A, And West, John E., 'Jack'
2nd Edition
0873898443, 978-0873898447
