Dave's Tires Inc. has been asked by its shareholders to calculatethe 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