Herb Corporation has provided the following information:

-What is Herb Corporation's economic value added?
A) $65,000
B) $19,000
C) $50,000
D) $6,000

Question

Herb Corporation has provided the following information:
 
-What is Herb Corporation's economic value added?
A) $65,000 
B) $19,000 
C) $50,000 
D) $6,000

Quizplus · Accepted Answer

Economic Value Added (EVA) is calculated as Net Operating Profit After Taxes (NOPAT) minus the capital charge. The capital charge is the cost of capital multiplied by the capital employed. Without specific numbers for Herb Corporation's NOPAT, cost of capital, and capital employed, it's impossible to accurately calculate EVA. However, given the choices provided and without additional information, there's no way to determine the correct calculation process or the inputs used. Therefore, any selection would be a guess. The correct answer, based on the information provided, is chosen as an example of how one might select an answer if they had the specific financial details of Herb Corporation.

Herb Corporation Has Provided the Following Information