Calculate the eva for east mullett manufacturing

Reference no: EM131779829

Question: East Mullett Manufacturing earned operating income last year as shown in the following income statement: Sales $3,750,000 Cost of goods sold 2,250,000 Gross margin $1,500,000 Selling and administrative expense 1,200,000 Operating income $ 300,000 Less: Income taxes (@ 40%) 120,000 Net income $ 180,000 At the beginning of the year, the value of operating assets was $1,600,000. At the end of the year, the value of operating assets was $1,400,000. Total capital employed equaled $1,200,000. East Mullett's actual cost of capital is 4%.

Required: Calculate the EVA for East Mullett Manufacturing.

Reference no: EM131779829

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