Assume the following for ABC corp. Net Operating Profit (before taxes)=$10,000 Cash Operating Taxes=$3,000 WACC =6% Total
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Question:
Assume the following for ABC corp.
Net Operating Profit (before taxes) = $10,000
Cash Operating Taxes = $3,000
WACC = 6%
Total Investment Capital = $200,000
Please calculate the following:
Capital Charge
Economic Value Added and
Return on Invested Capital (ROIC)
3) Capital Charge
A: $600
B: $180
C. $420
D. $12,000
E. NONE OF ABOVE (what is the correct answer.)
4) Economic Value Added
A. $7,000
B. $1,000
C. $13,000
D. $187,000
E. NONE OF ABOVE (what is the correct answer.)
5) Return on Invested Capital (ROIC)
A. 3.5%
B. 6%
C. 5%
D. 1.5%
E. NONE OF ABOVE (what is the correct answer.)
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
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