The Following Data Relates to the Miracle Corporation and Its

question 118

Multiple Choice

The following data relates to the Miracle Corporation and its Toy Division. $$\begin{array} { | l | r | } \hline \text { Toy Division sales } & \$ 8,000,000 \\\hline \text { Toy Division aperating income } & \$ 480,000 \\\hline \text { Toy Division total assets } & \$ 2,000,000 \\\hline \text { Toy Division current liabilities } & \$ \text { 600,000 } \\\hline \text { Corporate target rate of return } & 14 \% \\\hline \text { Corporate weighted average cost of capital } & 10 \% \\\hline \text { Corporate effective tax rate } & 30 \% \\\hline\end{array}$$

-What is the Toy Division's Economic Value Added (EVA) ?

• A)$140,000
• B)$196,000
• C)$200,000
• D)$336,000

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Definitions:

Core Competencies

The unique strengths and capabilities that allow an organization to achieve competitive advantage in its industry.

Business Knowledge

Understanding and insight related to the operational, financial, and strategic aspects of running a business.

Job Security

The probability that an individual will retain their job without the risk of becoming unemployed.

Succession Plans

Preparatory steps taken by an organization to ensure employees are recruited, developed, and maintained to fill each key role within the company over time.