Select information from BOINKE Corporations financial statem

Select information from BOINKE Corporation\'s financial statements is provided here. What was 2014 EVA? $163,800 $195,416 $72,800 $104,416

Solution

Monthly rate = 6%/ 12 = 0.005

Net operating profit after taxes = EBIT x (1- t)

                                                                = 780,000 x (1-0.40)

                                                                = 468,000

EVA = Net operating profit after taxes – (WACC x total assets)

        = 468,000 – (0.1520 x 2,600,000)

        = 72,800