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Scranton Shipyards Has $8 What Is Scranton's EVA? Answer Options Are Provided in Whole

Question 93

Multiple Choice

Scranton Shipyards has $8.0 million in total invested operating capital,and its WACC is 10%.Scranton has the following income statement:  Sales $10.0 million  Operating costs 6.0 million  Operating income (EBIT)  4.0 million  Interest expense 2.0 million  Earnings before taxes (EBT)  $2.0 million  Taxes (40%)  0.8 million  Net income $1.2 million \begin{array}{lr}\text { Sales } & \$ 10.0 \text { million } \\\text { Operating costs } &6.0 \text { million }\\\text { Operating income (EBIT) } & 4.0 \text { million }\\\text { Interest expense } & 2.0 \text { million }\\\text { Earnings before taxes (EBT) } & \$ 2.0 \text { million } \\\text { Taxes (40\%) } & 0.8 \text { million } \\\text { Net income } & \$ 1.2 \text { million }\end{array}
What is Scranton's EVA? Answer options are provided in whole dollar.


A) $1,840,000
B) $2,000,000
C) $1,600,000
D) $1,520,000
E) $1,440,000

Correct Answer:

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