A Firm Has an Average Investment of $10,000 During the Year

question 51

Multiple Choice

A firm has an average investment of $10,000 during the year. During the same period, the firm generates after-tax income of $1,000.
Calculate the economic value added (EVA) for the firm. (The cost of capital is 15 percent.)

• A)−$500
• B)$1,500
• C)$1,200
• D)$1,000

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Definitions:

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Median

Midpoint of a series, with an equal number of items above and below.

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