Question: Mythier plc, in its first year, produced profits after deduction of tax but before deduction of interest of lm. The amount invested by debt holders

Mythier plc, in its first year, produced profits after deduction of tax but before deduction of interest of £lm. The amount invested by debt holders was £4m. Equity holders also invested £4m. Interest paid during the year was £0.24m and the weighted average is 8 per cent, while the capital is 10 per cent.
a. Calculate economic profit using the entity approach,
b. Calculate economic profit using the equity approach.

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