Casey Motors recently reported the following information: Net income = $850,000. Tax rate = 40%.

Question:

Casey Motors recently reported the following information:

• Net income = $850,000.
• Tax rate = 40%.
• Interest expense = $200,000.
• Total investor-supplied operating capital employed = $9 million.
• After-tax = 10%.

What is the company’s EVA?

a. $67,200
b. $82,600
c. $64,400
d. $70,000
e. $83,300

Cost Of Capital
Cost of capital refers to the opportunity cost of making a specific investment . Cost of capital (COC) is the rate of return that a firm must earn on its project investments to maintain its market value and attract funds. COC is the required rate of...