Solution-Calculatethe economic value added

Calculatethe economic value added

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Reference no: EM131273888

Dave's Tires Inc. has been asked by its shareholders to calculatethe economic value added (EVA) for the current year. Dave'scontroller has the following information available:

Before-tax profit $6,000,000
Total assets 10,000,000
Current liabilities 2,000,000
Average interest rate on debt 10%
Average tax rate 40%

The company's EVA is:

a. $1,600,000

b. $5,200,000

c. $2,800,000

d. $2,400,000

Reference no: EM131273888

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Calculatethe economic value added

Reference no: EM131273888

Reference no: EM131273888

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