Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. lumber corporation is a private company and the ma

Lumber corporation is a private company and the managers want to know how much of...

90.2K

Verified Solution

Question

Accounting

image

Lumber corporation is a private company and the managers want to know how much of cconomic value has been added during the current year. So they decided to use EVA to measure the financial performance The company provided the management accountant department with the following financial data found in the table below S000 Current liabilities 65 300 Current Assets 3094 Long term liabilities [Bond Payable 1R$ 200 Equity 150.000 Research & development 25.000 Training expenses 13.000 Tax rate 25% Net income 45 500 Sales 76200 Cogs 33.500 Interest paid on debt 17.000 Risk free rate 6% Risk premium 6.5% Assume that current liabilities are not interest bearing obligation Cost of equity is government bond rate+risk premium REQUIRED 1. Calculate tax, interest expense and EBIT (operating income) 2 Calculate the EBIT after tax 3. Calculate the total assets. 4 Calculate working capital employed (WCE) 5. What is the WACC of the company? 6. Calculate the economic value added (EVA) 7. What will happen if a company has negative EVA for a while

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

Problem 19-20 Dividends versus Reinvestment After completing its capital spending for the year, Carlson Manufacturing has $2,200...

Finance
Q

what does the pupillary reflex tell you about the afferent nerve pathway? Which division of the ANS...

Medical Sciences
Q

8 mins persuasive speech on SELF-DRIVING CARS SHOULD BE ILLEGAL! Outline

Physics
Q

What are the defining features of bulimia nervosa and anorexia nervosa?

Psychology
Q

The Persians were the first civilization to come up with what?A. FarmingB. Written LanguageC. MusicD....

Biology
Q

IPLE CHOICE Choose the one alternative that best completes the statement or answers the question...

Biology
Q

An apple farm yields an average of 41 bushels of apples per tree when 25...

Calculus
Q

Dinham Kennel uses tenant-days as its measure of...

Accounting
Q

Polaski Company manufactures and sells a single product called a Ret. Operating at capacity, the...

Accounting
Q

Problem 16-50 After-Tax Cash Flows; Robotic Equipment (Section 2) (LO 16-4, 16-5, 16-6) Scientific Frontiers...

Accounting
Q

Carmen's Beauty Salon has estimated monthly financing requirements for the next six months as follows:...

Accounting
Q

A. What types of purchases would be considered capital investments? B. Why is...

Accounting