Jamison Auto Parts produces replacement parts for automobiles. Last year, Jamison had EVA® netincome of $200,000, cost of capital of 10%, and EVA® capital of $750,000. Determine the firm’seconomic value added.
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Jamison Auto Parts produces replacement parts for automobiles. Last year, Jamison had EVA® net
income of $200,000, cost of capital of 10%, and EVA® capital of $750,000. Determine the firm’s
economic value added.
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- 1.) A firm has an average investment of $100,000 during the year. During the same period, the firm generates an after-tax income of $16,000. The cost of capital is 15 percent. what is the economic profit? Required: a.) Calculate the ROI and calculate the Economic Profit.Do I have this set-up correctly? 3-11 EVA For 2018, Gourmet Kitchen Products reported 22,000,000 of sales and 19,000,000 of operating costs (including depreciation). The company has 15,000,000 of total invested capital. Its after-tax cost of capital is 10%, and its federal-plus-state income tax rate was 36%. What was the firm’s economic value added (EVA), that is, how much value did management add to stock- holders wealth during 2018? EVA= Net Operating profit after taxes (NOPAT)- Annual dollar cost of capital * Average Cost of Capital Sales- Operating Costs= Net operating profit after taxes 22,000,000- 19,000,000= 3,000,000 Total amount of Invested Capital * After Tax cost of capital= Annual Dollar cost of Capital 15,000,000 * 10%= 1,500,000 EVA= 3,000,000-1,500,000 * (1- Tax Rate) 1,500,000 * (0.64)= 960,000 added to stockholder's wealthC Company has the following data for the year ending 12/31/2020 (dollars are in thousands): Net income = $600; EBIT = $1,184; Total assets = $3,000; Short-term investments = $200; Total capital employed = $2,193; and tax rate = 30%. The company’s WACC is 11.07%. What was its Economic Value Added (EVA) for the year 2020? Round your answer to the nearest dollar. Group of answer choices: $583 $586 $577 $572 $580
- pharoah marble company has total assets of 13350000 sales of 18690000 and net income of 4672500. management expects sales to grow by 25% next year. all assets and costs (including taxes) vary directly with sales, and management expects to maintain a payout ratio of 65%. Calculate Pharoah's EFN.A company is going to buy a new machine for manufacturing its products. Three machines are available. Data is as follows: Money is worth 17% before taxes to the company. Which machine should be chosen?Use Future Worth MethodThe average net profits expected in future by Khalifa and Co. are OMR 30,000 per year. The average capital employed in the business by firm is OMR 200,000. The normal rate of return on the capital employed in similar business is 10%. Calculate goodwill of the firm by: 1. Super Profit Method on the basis of two-year purchase 2. Capitalization Method
