ABC\'s EBIT is $9 million. The depreciation expense is $0.5 million and interest

Question

ABC's EBIT is $9 million. The depreciation expense is $0.5 million and interest expense is $0.5 million. The corporate tax rate is 30%. The company has 12 million in operating current assets and $6 million operating current liabilities. It has $5 million in net plant and equipment. The after-tax cost of capital (WACC) is 15%. Assume that the only non-cash item is depreciation. The total net operating capital last year was $8 million. What was the companys economic value added (EVA)? Note: Enter your answer rounded off to two decimal points. Do not enter $ in the answer box. For example, if your answer is $1200000.345 then enter as 1200000.345 in the answer box.

Explanation / Answer

EVA = Net Operating Profit After Tax

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