Ramirez Company Has a Weighted-Average After-Tax Cost of Capital of 12%;

question 105

Multiple Choice

Ramirez Company has a weighted-average after-tax cost of capital of 12%; $320,000 in long term assets; $80,000 in current assets; and $400,000 in capital.In order to create Economic Value Added,net operating profit after taxes must exceed

• A)$26,400.
• B)$38,400.
• C)$ 7,200.
• D)$16,800.
• E)$48,000.

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Definitions:

Discovery

Pre-trial disclosure of information, consisting of discovery of documents and examination for discovery.

Judgment Creditor

The person to whom a court awards damages or costs.

Garnishee Order

A legal order issued by a court that requires a third party to withhold the assets of a debtor, typically used to secure payment of a debt or judgment.

Writ of Execution

A court order that enables the enforcement of judgments, typically by seizing and selling the debtor's property.