The Following Information Is Available for Pohler Company Invested Capital Is Defined as Total Assets

question 55

Multiple Choice

The following information is available for Pohler Company:
$\begin{array}{lclc}\text { Current assets } & \$ 100,000 &{\text { Current liabilities }} & \$ 75,000 \\\text { Property, plant and } & & \text { Long-term liabilities } & 100,000 \\\text { equipment } & 50,000 & \text { Stockholders'equity } & 125,000 \\\text { Other assets } & {150,000} & \text { Total liabilities and } \\\text { Total assets } &{\$ 300,000}& \text { stockholders'equity } & \$ 300,000\\\end{array}$
Invested capital is defined as total assets.Before-tax operating profit is $175,000.After-tax operating profit is $125,000.The after-tax cost of capital is 10%.What is economic profit?

• A) $95,000
• B) $125,000
• C) $145,000
• D) $175,000