RJS Foods reported that its net income was $65,000 last year. The firm’s interest expense was reported to be $40,000, and its marginal tax rate was 35 percent. According to the company’s balance sheet, invested capital equals $800,000.
a. Compute the operating income (EBIT) that RJS Foods generated last year.
b. If the WACC for RJS Foods is 12 percent, what was its EVA last year?