Problem:
For 2012, Everyday Electronics reported $23 million of sales and $18 million of operating costs (including depreciation). The company has $15 million of investor-supplied operating capital. Its weighted average cost of capital is 10% and its federal-plus-state income tax rate was 35%.
Requirement:
Question 1: What was the firm's Economic Value Added (EVA), that is, how much value did management add to stockholders' wealth during 2012?
Question 2: Write out your answer completely. For example, 25 million should be entered as 25,000,000.
Note: Please show the work not just the answer.