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Quantitative Problem: Rosnan Industries 2017 and 2016 balance sheets and income statements are shown below. All of the balan
Income Statements: 2017 2016 Sales $2,000 $1,500 Operating costs excluding depreciation 1,250 1,000 EBITDA $750 $500 Deprecia
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Answer #1

Market Value Added (MVA) = (Market price * number of shares outstanding) - Book value of equity
= ($27.78 * 90) - (1,225 + 700)
= 2,500.2 - 1,925
= $575.2
Market Value Added (MVA) = $575.


EVA = EBIT * (1 -t) - (Total invested capital * after tax cost of capital)
Total invested capital = Notes payable + long term debt + equity
= 150 + 450 +(1,225 + 700)
= $2,525
EVA = $650 * (1 - 0.40) - ($2,525 * 9%)
= $390 - $227.25
= $162.75
EVA = $162.75

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