Estimate a firm's economic value added (EVA) based on the following information: NOPAT = $400,000; amount of financial capital used = $1,600,000; and WACC = 19%.

Name: Estimate a firm's economic value added (EVA) based on the following information: NOPAT = $400,000; amount of financial capital used = $1,600,000; and WACC = 19%.
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Question

Quizplus · Accepted Answer

EVA = NOPAT - (WACC x amount of financial capital used)
EVA = $400,000 - (0.19 x $1,600,000)
EVA = $400,000 - $304,000
EVA = $96,000

Estimate a Firm's Economic Value Added (EVA) Based on the Following