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For 2011, Bargain Basement Stores Reported $11,500 of Sales and $5,000

Question 123

Multiple Choice

For 2011, Bargain Basement Stores reported $11,500 of sales and $5,000 of operating costs (including depreciation) . The company has $20,500 of investor-supplied operating assets (or capital) , the weighted average cost of that capital (the WACC) was 10%, and the federal-plus-state income tax rate was 40%. What was the firm's Economic Value Added (EVA) , i.e., how much value did management add to stockholders' wealth during 2011?


A) $1,670
B) $1,758
C) $1,850
D) $1,943
E) $2,040

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