You have been asked by an investor to compute for the Economic Value Added of the companies he is considering to invest into as follows: E V A Net Investment 55,000,000 60,000,000 70,000,000 WACC 8% 9% 10% Net Income after Tax 3,510,000 2,750,000 5,230,0000 Net Operating Income After Tax 4,550,000 5,450,000 6,850,000 Which Company under consideration has the highest EVA Which companies would you recommend for investment, Why? What is the EVA of each companies under consideration?
You have been asked by an investor to compute for the Economic Value Added of the companies he is considering to invest into as follows: E V A Net Investment 55,000,000 60,000,000 70,000,000 WACC 8% 9% 10% Net Income after Tax 3,510,000 2,750,000 5,230,0000 Net Operating Income After Tax 4,550,000 5,450,000 6,850,000 Which Company under consideration has the highest EVA Which companies would you recommend for investment, Why? What is the EVA of each companies under consideration?
Chapter9: Responsibility Accounting And Decentralization
Section: Chapter Questions
Problem 3PB: The income statement comparison for Rush Delivery Company shows the income statement for the current...
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- You have been asked by an investor to compute for the Economic Value Added of the companies he is considering to invest into as follows:
|
E |
V |
A |
Net Investment |
55,000,000 |
60,000,000 |
70,000,000 |
WACC |
8% |
9% |
10% |
Net Income after Tax |
3,510,000 |
2,750,000 |
5,230,0000 |
Net Operating Income After Tax |
4,550,000 |
5,450,000 |
6,850,000 |
- Which Company under consideration has the highest EVA
- Which companies would you recommend for investment, Why?
- What is the EVA of each companies under consideration?
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