Problemabcs ebit is 12 million the depreciation expense is, Ask an Expert

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Problem:

ABC's EBIT is $12 million. The depreciation expense is $0.5 million and interest expense is $0.5 million. The corporate tax rate is 30%. The company has 10 million in operating current assets and $3 million operating current liabilities. It has $12 million in net plant and equipment. The after-tax cost of capital (WACC) is 8%. Assume that the only non-cash item is depreciation. The total net operating capital last year was $15 million.

Required:

What was the company's economic value added (EVA)?

Note: Please provide full description.

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M91147991

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