Firefly Travel Services has recently shifted its performance measurement system to include Economic Value Added (EVA). The
Question:
Firefly Travel Services has recently shifted its performance measurement system to include Economic Value Added (EVA®). The Firefly accountant gathered the following data for 2012:
Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 300,000
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,220,000
Current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22,000
The average tax rate on income for Firefly Travel Services is 32%. Assume that the WACC is 17%. Compute Firefly’s EVA®.
Step by Step Answer:
Accounting concepts and applications
ISBN: 978-0538745482
11th Edition
Authors: Albrecht Stice, Stice Swain