Exhibit 9-6
USE THE FOLLOWING INFORMATION TO ANSWER THE NEXT

question 20

Multiple Choice

Exhibit 9-6
USE THE FOLLOWING INFORMATION TO ANSWER THE NEXT QUESTION(S)
You are provided with the following information on Kayray Corporation. Your ultimate objective is to calculate the EVA for the firm. $\begin{array}{llcc} \text {LIFO reserve } & 60 \\ \text { Net plant, property, and equipment } & 1325 \\ \text { Other assets } &30 \\ \text {Goodwill } &325 \\ \text { Accumulated Goodwill amortized } & 65\\ \text { PV of Operating leases } & 140 \\ \text { Tax benefit from interest on expenses } & 10\\ \text {Tax benefit from interest on leases } &5 \\ \text { Taxes on non-operating income } &2 \\ \text {Implied interest on op. lease } & 9.5 \\ \text { Increase in LIFO reserve } & 12 \\ \text { Goodwill amortization } & 15 \\ \text { Operating profit } & 550\\ \text { Income tax expense } & 215 \\ \text { Net working capital } & 440 \\ \text { WACC } & 0.12\\\end{array}$

-Refer to Exhibit 9-6. Calculate the cash operating expenses for the firm.

• A) 225
• B) 228
• C) 232
• D) 242
• E) 252

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Definitions:

Market Pricing

The process of determining the salary levels and ranges for positions within a company by comparing them with similar jobs in the external labor market.

Job Evaluation

A systematic process for determining the relative value or worth of a job in an organization, which helps to establish fair compensation.

Skill-Based Pay

A compensation system where pay levels are determined by an employee’s skills, knowledge, and the ability to perform certain tasks, rather than job title or rank.

Large Hotel

A significant accommodation facility offering a range of services, often including rooms, food, and entertainment, for travelers and guests.