Answer the following questions using the information below:
Yasir Company has two sources of funds: long-term debt with a market and book value of $5 million issued at an interest rate of 12%, and equity capital that has a market value of $4 million (book value of $2 million). Yasir Company has profit centers in the following locations with the following operating incomes, total assets, and current liabilities. The cost of equity capital is 12%, while the tax rate is 25%.

-What is the EVA for Riyadh?
A) $163,730
B) $196,270
C) $360,000
D) $127,870

Question

Answer the following questions using the information below:
Yasir Company has two sources of funds: long-term debt with a market and book value of $5 million issued at an interest rate of 12%, and equity capital that has a market value of $4 million (book value of $2 million). Yasir Company has profit centers in the following locations with the following operating incomes, total assets, and current liabilities. The cost of equity capital is 12%, while the tax rate is 25%.
 
-What is the EVA for Riyadh?
A) $163,730 
B) $196,270 
C) $360,000 
D) $127,870

Quizplus · Accepted Answer

EVA for Riyadh is $163,730, which is calculated as NOPAT - WACC * Capital.

Answer the Following Questions Using the Information Below