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What is OLI CORP economic value added

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Reference no: EM132955400

Question - The following year-end data pertains to OLI CORP, a subsidiary of GUMP Holdings:

Earnings before interest and taxes 800,000

Current assets 800,000

Non-current assets 3,200,000

Current liabilities 400,000

Non-current liabilities 1,000,000

OLI CORP pays an income tax rate of 30%. Its weighted average cost of capital is 9%, though top management of GUMP Holdings only accept projects that at least meet a rate of return of 10%. What is OLI CORP's economic value added?

a. P236,000

b. P440,000

c. P200,000

d. P326,000

e. P476,000

Reference no: EM132955400

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