Textbook Problem

Use the following information for Brief Exercises 11-19 through 11-21:

Barnard Manufacturing earned operating income last year as shown in the following income statement:

At the beginning of the year, the value of operating assets was $2,700,000. At the end of the year, the value of operating assets was $2,300,000.

Brief Exercise 11-21 Calculating Economic Value Added

Refer to the information for Barnard Manufacturing on the previous page. Total capital employed equaled $1,400,000. Barnard’s actual cost of capital is 12%.

Required:

Calculate the EVA for Barnard Manufacturing.