Consider the following table (shown in two parts):

a. What is the EVA in year 5?

b. What is the capital charge in year 6?

Transcribed Image Text:

OPERATING NET EOY REVENUE EXPENSES DEPRECIATION OPERATING PROFIT TAXES 5 $2,765,000 $2,379,200 $49,536 $336,264 $134,506 6 $2,765,000 $2,379,200 $49,536 $336,264 $134,506 7 $2,765,000 $2,379,200 $48,768 $337,032 $134,813 COST CAPITAL EVA EOY NOPAT CAPITAL OF CAPITAL CHARGE (ECON PROFIT) 5 $201,758 $74,304 0.1 $12,384 XXX 6 $201,758 $144,768 0.1 XXX 7 $202,219 $96,000 0.1