Earn in order to break even in economic terms

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Reference no: EM131859716

Equity investors have contributed $250,000 to your start-up business, while creditors provided a loan of $300,000. You have calculated your firm's WACC at 10 percent. The annual interest payment is $25,000 and the marginal corporate tax rate is 35 percent. How much profit will your equityholders need to earn in order to break even in economic terms (i.e., EVA of zero)?

Reference no: EM131859716

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