Assume Division 1 of the XYZ Company Had the Following

question 131

Multiple Choice

Assume Division 1 of the XYZ Company had the following results last year. Management's required rate of return is 8% and the weighted average cost of capital is 6%. Its effective tax rate is 30%. What is the division's economic value added?

• A)$60,000
• B)$130,000
• C)$270,000
• D)$430,000