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8) 18 Points total] Company XYZ had sales of $600 million, total expenses of $400 million, and has a tax rate of 35%. The company's
8) 18 Points total] Company XYZ had sales of $600 million, total expenses of $400 million, and has a tax rate of 35%. The company's total assets are $1 billion. The company's cost of capital is 7%. The CEO of XYZ receives a bonus equal to 10% of the economic value added (AKA residual income). Their bonus cannot be negative. a) [4 Points] List two strengths and two weaknesses of economic value added (EVA). b) Points) Based on the information above, determine the value of the CEO's bonus. 3
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