$2$

eBook

Problem Walk$-$Through

For $2021,$ Gourmet Kitchen Products reported $$24$ million of sales and $$19$ million of operating costs $($including depreciation$).$ The company has $$15$ million of total invested capital. Its after$-$tax cost of capital is $9\%$ and its federal$-$plus$-$state income tax rate was $25\%.$ What was the firm's economic value added $($EVA$),$ that is$,$ how much value did management add to stockholders' wealth during $2021?$ Write out your answer completely. For example, $25$ million should be entered as $25,000,000.$ Round your answer to the nearest dollar, if necessary.

$