The following data relates to the ABC Corporation and its A Division. A Division sales P 8,000,000 A Division operating income P 480,000 A Division total assets P 2,000,000 A Division current liabilities P 600,000 Corporate target rate of return 14% Corporate weighted average cost of capital 10% Corporate effective tax rate 30% What is the A Divisions Economic Value Added (EVA)?
The following data relates to the ABC Corporation and its A Division. A Division sales P 8,000,000 A Division operating income P 480,000 A Division total assets P 2,000,000 A Division current liabilities P 600,000 Corporate target rate of return 14% Corporate weighted average cost of capital 10% Corporate effective tax rate 30% What is the A Divisions Economic Value Added (EVA)?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The following data relates to the ABC Corporation and its A Division.
|
A Division sales |
P 8,000,000 |
|
A Division operating income |
P 480,000 |
|
A Division total assets |
P 2,000,000 |
|
A Division current liabilities |
P 600,000 |
|
Corporate target rate of return |
14% |
|
Corporate weighted average cost of capital |
10% |
|
Corporate effective tax rate |
30% |
What is the A Divisions Economic Value Added (EVA)?
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