Here are simplified financial statements of Phone Corporation from a recent year

Question

Here are simplified financial statements of Phone Corporation from a recent year:
INCOME STATEMENT
(Figures in millions of dollars)   Net sales 12,900     Cost of goods sold 3,910     Other expenses 4,132     Depreciation 2,428     Earnings before interest and taxes (EBIT) 2,430     Interest expense 670     Income before tax 1,760     Taxes (at 35%) 616     Net income 1,144     Dividends 846  
BALANCE SHEET
(Figures in millions of dollars) End of Year Start of Year   Assets      Cash and marketable securities 86   155        Receivables 2,232   2,430        Inventories
172   223        Other current assets 852   917           Total current assets 3,342   3,725        Net property, plant, and equipment 19,943   19,885        Other long-term assets 4,186   3,740           Total assets 27,471   27,350     Liabilities and shareholders Here are simplified financial statements of Phone Corporation from a recent year:

Explanation / Answer

The formula for calculating EVA is as follows:

= Net Operating Profit After Taxes (NOPAT) - (Capital * Cost of Capital)

The net income is 1,144 million dollars.

8.0% of that is 91.52 million dollars.

1,114 - 91.52 = 1052.48

The EVA is 1052.48 million dollars

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