A company has earned an operating return on assets of 12, Ask an Expert

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A company has earned an operating return on assets of 12%, above the industry average of 10%. It has been estimated that the company’s investors have an opportunity cost on their investment of 14%, a return equal to the company’s overall cost of capital. The company’s total assets were $100 million. Compute the EVA (economic value added) for the firm. How does this calculation compare with a ratio analysis comparing the firm’s performance relative to its competitors?

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Financial Management, Finance

Category:- Financial Management
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