Dave's Tires Inc. has been asked by its shareholders to calculate the economic value added (EVA) for the current year. Dave'scontroller has the following information available:
Before-tax profit $6,000,000
Total assets 10,000,000
Current liabilities 2,000,000
Average interest rate on debt 10%
Average tax rate 40%
The company's EVA is:
a. $1,600,000
b. $5,200,000
c. $2,800,000
d. $2,400,000