Exercise 12-13 The following income statements and other information are availab
ID: 2582395 • Letter: E
Question
Exercise 12-13 The following income statements and other information are available for the Golden Company: 2016 $387,772,000 $267,940,000 $204,040,000 213,274,600 128,611,200 97,939,200 174,497,400 139,328,800 106,100,800 2017 2015 Sales Less cost of goods sold Gross margin Less Selling and administrative costs Research and development 27,144,040 26,794,000 20,404,000 02,000 131,842,480 99,137,800 75,494,800 39,552,744 29,741,340 22,648,440 $92,289,736 $69,396,460 $52,846,360 $647,311,000 $611,451,000 $410,199,100 9,876,220 12% 15,510,880 13,397,000 10,2 Income from operations Less taxes on income Net income Total assets Noninterest-bearing current liabilities Cost of capital 15,373,600 12% 11,235,000 12% Calculate EVA for 2017. Assume that for purposes of calculating EVA, the company capitalizes research and development expenditures and amortizes them over 3 years, including the year they are incurred. For external reporting purposes, research and development is expensed in the year incurred, as indicated in the income statements above. (Round answer to the nearest whole dollar, e.g. 5,725. Enter negative answers preceding either-sign, e.g.-45 or in parentheses, e.g. (45).)Explanation / Answer
EVA= NOPAT- (Capital Investment* WACC)
Research and Development Cost= (15510880+13397000+10202000)/3
Tax Rate= 39552744*100/131842480=30%
Gross Margin for 2017 174497400
Less: Selling & Administative Cost (27144040)
Less: Research & Development Cost (13036627)
Income Before Tax= 134316733
Tax@30% (40295020)
NOPAT 94021713
Operating Capital= 647311000-15373600=631937400
EVA= 94021713-(631937400*12%)= 18189225
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