17.
Compute the net operating profit after taxes (NOPAT), using the equation as shown below:
NOPAT = Net income + {Interest expenses*(1 – Tax rate)}
= $600,000 + {$200,000*(1 – 0.40)}
= $600,000 + $120,000
= $720,000
Hence, the NOPAT is $720,000.
Compute the economic value added (EVA), using the equation as shown below:
EVA = NOPAT – (Capital employed*WACC)
= $720,000 – ($9,000,000*10%)
= $720,000 - $900,000
= - $180,000
Hence, the EVA is -$180,000.
WACC = (NOPAT-WACC*CAPITAL INVESTED)
NET INCOME MEANS OPERATING PROFIT-TAX
NET INCOME ALREADY GIVEN IN THIS QUESTION AND CAPITAL STRUCTURE NOT GIVEN IN THIS SITUATION YOU'RE TREATED AS A OPERATING CAPITAL
EVA=600,000-(9%X9,000,000)
EVA=-300,000
17. Casey Motors recently reported the following information: • Net income - $600,000. • Tax rate=40%...
28. Casey Motors recently reported the following information Net income $600,000. " Tax rate = 40%. Interest expense- $200,000. Total invested capital employed = $9 million. -After-tax cost of capital = 10%. What is the company's EVA? a. -198,000 b.-135,000 c. -203,400 d. -180,000 e. -216,000
Casey Motors recently reported the following information: ∙ Net income = $875,000. ∙ Tax rate = 40%. ∙ Interest expense = $200,000. ∙ Total invested capital employed = $9 million. ∙ After-tax cost of capital = 10%. What is the company’s EVA?
Casey Motors recently reported net income of $118 million. The firm's tax rate was 40 percent, and interest expense was $40 million. The company's after-tax cost of capital is 13 percent, and the firm's total investor supplied operating capital employed equals $826 million. What is the company's EVA? (Answers are in $ millions.) $196.67 $118.00 $34.62 $142.00 $107.38
Molteni Motors Inc. recently reported $3.5 million of net income. Its EBIT was $5.75 million, and its tax rate was 30%. What was its interest expense? (Hint: Write out the headings for an income statement and then fill in the known values. Then divide $3.5 million net income by 1 − T = 0.7 to find the pre-tax income. The difference between EBIT and taxable income must be the interest expense.) Enter your answer in dollars. For example, an answer...
Molteni Motors Inc. recently reported $3 million of net income. Its EBIT was $7.5 million, and its tax rate was 40%. What was its interest expense? (Hint: Write out the headings for an income statement and then fill in the known values. Then divide $3 million net income by 1 − T = 0.6 to find the pre-tax income. The difference between EBIT and taxable income must be the interest expense.) Round your answer to the nearest dollar. Enter your...
Molteni Motors Inc. recently reported $3.5 million of net income. Its EBIT was $5.5 million, and its tax rate was 30%. What was its interest expense? (Hint: Write out the headings for an income statement and then fill in the known values. Then divide $3.5 million net income by 1 -T-0.7 to find the pre-tax income. The difference between EBIT and taxable income must be the interest expense.) Enter your answer in dollars. For example, an answer of $1.2 milion...
Molteni Motors Inc. recently reported $2.25 million of net income. Its EBIT was $7 million, and its tax rate was 40%. What was its interest expense? Round your answer to the nearest dollar. Enter your answer in dollars. For example, an answer of $1.2 million should be entered as 1,200,000.
Please explain and show work: (2-3) Molteni Motors Inc. recently reported $6 million of net income. Its EBIT was $13 million, Income Statement and its tax rate was 40%. What was its interest expense? (Hint: Write out the headings for an income statement and then fill in the known values. Then divide $6 million net income by 1 T 0 6 to find the pre-tax income. The difference between EBIT and taxable income must be the interest expense. Use this procedure...
Income Statement Talbot Enterprises recently reported an EBITDA of $7.0 million and net income of $1.75 million. It had $2.8 million of interest expense, and its corporate tax rate was 30%. What was its charge for depreciation and amortization? Enter your answer in dollars. For example, an answer of $1.2 million should be entered as 1,200,000. Round your answer to the nearest dollar. WORKED AS EBITDA - D&A = EBIT EBIT - INTEREST = EBT EBT - TAX = NET...
A. Molteni Motors Inc. recently reported $2.25 million of net income. Its EBIT was $5.25 million, and its tax rate was 40%. What was its interest expense? (Hint: Write out the headings for an income statement and then fill in the known values. Then divide $2.25 million net income by 1 − T = 0.6 to find the pre-tax income. The difference between EBIT and taxable income must be the interest expense.) Round your answer to the nearest dollar. Enter...