A Firm Has Earnings Before Interest and Taxes (EBIT) of $22

question 14

Multiple Choice

A firm has earnings before interest and taxes (EBIT) of $22 million, total invested capital of $74 million, and average cost of funds of 12 percent. The firm has a marginal tax rate of 35 percent, and 4.2 million shares of the firm are outstanding. What is the firm's economic value added (EVA) of the firm?

• A)$4.83 million
• B)$5.42 million
• C)$6.33 million
• D)$3.61 million
• E)$7.97 million

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Definitions:

Evolutionary Structures

Biological structures or traits that have been shaped and maintained through evolutionary processes over generations.

Hindbrain

The part of the brain, containing some of the most evolutionarily primitive structures, that is responsible for transmitting information from the spinal cord to the brain, regulating life support functions, and helping to maintain balance.

Forebrain

The part of the brain containing the thalamus, hypothalamus, hippocampus, amygdala, and cerebral cortex.

Midbrain

The part of the brain containing structures that are involved in relaying information between other brain regions and in regulating levels of alertness.