Problem:
Barnes' Brothers has the following data for the year ending 12/31/07: Net income = $600; Net operating profit after taxes (NOPAT) = $700; Total assets = $2,500; Short-term investments = $200; Stockholders' equity = $1,800; Total debt = $700; and Total operating capital = $2,100. Barnes' weighted average cost of capital is 10%.
Required:
Question: What is its economic value added (EVA)?
Answer choices are:
a. $399.11
b. $420.11
c. $442.23
d. $465.50
e. $490.00
Note: Please show how you came up with the solution.