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Calculate after-tax operating income for El Suezo

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Problem - El Suezo Inc. had sales of $5,000,000, cost of goods sold of $3,500,000, and selling and administrative expense of $500,000 for its most recent year of operations. El Suezo faces a tax rate of 40%. Also, El Suezo employed $2,000,000 of debt capital and $4,000,000 of equity capital in generating its return. Finally, the company's actual cost of capital is 8%.

Required -

Calculate after-tax operating income for El Suezo.

Calculate EVA for El Suezo.

Reference no: EM132701463

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