The MistleToe Corporation sells Christmas decorations. They had the following financial

information for 2020:

Pre-Tax Operating Profit

$1,500,000

Net Operating Assets (Invested Capital)

$10,000,000

Capital employed but not included in operating assets

$2,000,000

Debt

Equity

8,000,000

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.

Your job is to calculate the Economic Value Added to the corporation in 2020 to help calculate

bonuses.