Compute the companys eva for 20x4 and 20x5. compare the, Ask an Expert

Accounting

A company that uses EVA reported the following results for 20X4 and 20X5 (in millions):

..............................................20X4............20X5
Pretax operating Income.......5,698...........5,700
Cash Taxes...........................1,676...........1,600

Average adjusted invested capital was $20,308 million in 20X4 and $18,091 million in 20X5, and the cost of capital was 9% in both 20X4 and 20X5.

1. Compute the Company's EVA for 20X4 and 20X5.

2. Compare the company's performance in creating value for its shareholders in 20X5 with that in 20X4.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9283180

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