Determining firm economic value added


Everyday Electronics reported $23 million of sales and $19 million of operating costs (including depreciation). The company has $15 million of investor-supplied operating capital. Its weighted average cost of capital is 9% and its federal-plus-state income tax rate was 36%. What was the firm's Economic Value Added (EVA), that is, how much value did management add to stockholders' wealth during 2012?

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Finance Basics: Determining firm economic value added
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