HHH IncReported $12,500 of Sales and $7,025 of Operating Costs (Including

question 37

Multiple Choice

HHH Inc.reported $12,500 of sales and $7,025 of operating costs (including depreciation) .The company had $18,750 of investor-supplied operating assets (or capital) ,the weighted average cost of that capital (the WACC) was 9.5%,and the federal-plus-state income tax rate was 40%.What was HHH's Economic Value Added (EVA) ,i.e. ,how much value did management add to stockholders' wealth during the year?

• A) $1,357.13
• B) $1,428.56
• C) $1,503.75
• D) $1,578.94
• E) $1,657.88

---

Definitions:

Net Assets

The total assets of an entity minus its total liabilities, representing the entity's equity value or net worth.

Income Ratio

A financial metric that compares different streams of income to assess financial performance or profitability.

Capital Balances

Capital balances indicate the amount of equity a partner or shareholder has in a business, reflecting the net contributions and withdrawals, plus their share of profits or losses.

Income and Losses

Income and losses refer to the financial results of a company's operations, with income indicating profit and losses indicating expenses exceeding revenues.