What is the economic value added (EVA) for the company for the year to 30 April 2010?

At 30 April 2010, the net assets of Barangia Co had a book value of $22,500,000 and an economic value of $29,900,000. The company’s weighted average cost of capital is estimated to be 16% per annum, and finance can currently be obtained at a rate of 14% per annum.

Net operatingprofitafter tax (NOPAT) has been calculated at $4,851,200.

What is the economic value added (EVA) for the company for the year to 30 April 2010?
A . $67,200
B . $805,200
C . $1,251,200
D . $1,701,200

View Answer

Answer: A