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CTP · Question #878
CTP Question #878: Real Exam Question with Answer & Explanation
The correct answer is B. $3,982.14. See the full explanation below for the reasoning.
Question
- (Topic 9) A manufacturing company's long-term capital structure is 30% debt and 70% equity, its cost of equity is 10%, its average cost of debt is 8%, and the marginal tax rate is 34%. If the company has invested total capital of $567,865 in its production unit and the unit's operating profit is $79,856, what is the economic value added (EVA) of the unit?
Options
- A($674.35)
- B$3,982.14
- C$5,412.56
- D$6,571.78
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