Use the following data to calculate economic profit in year1. ear Sales Expenses other than interest Depreciation

Use the following data to calculate economic profit in year1.

Transcribed Image Text:

ear Sales Expenses other than interest Depreciation Earnings before interest and taxes (EBIT) Taxes on EBIT @40% Eamings before interest and after taxes (EBIAT) Current assets less excess cash and securities Non-interest-bearing current liabilities Adjusted net working capital Gross property, plant and equipment Accumulated depreciation Net property, plant and equipment Invested capital Return on invested capital (EBIAT invested capital) 1,000 500 200 300 120 180 340 120 220 2,000 2,300 1,200 1,000 1,100 1,200 1,320 300 100 200 1,000 15% Based on previous year's invested capital