Question

Asked Dec 6, 2019

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- A firm has EBIT of $7.5 million, a 33% tax rate, a weighted average cost of capital of 8.95% and total capital (long-term debt and equity) of $55 million. What is their economic value added (EVA)?

- $102,500
- $112,667
- $165,500
- $3,264,250

Step 1

EBIT = $7.5 Million

Tax Rate = 33%

Weighted Average Cost of Capital (WACC) = 8.95%

Total Capital = $55 ...

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