FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Metlock Enterprises is capitalized 40% with debt and 60% with equity. Its average debt rate is 7%, and its average equity rate is 9%.
Metlock's best-performing segment earned operating income of $204,000 using invested capital of $1,270,000. The company's tax
rate is 22%.
Calculate this segment's EVA this year.
EVA
$
54980
If its EVA last year was $37,000 based on the same WACC and the same asset base, how much after-tax operating income did it earn
last year?
After-tax operating income
181000
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Transcribed Image Text:Metlock Enterprises is capitalized 40% with debt and 60% with equity. Its average debt rate is 7%, and its average equity rate is 9%. Metlock's best-performing segment earned operating income of $204,000 using invested capital of $1,270,000. The company's tax rate is 22%. Calculate this segment's EVA this year. EVA $ 54980 If its EVA last year was $37,000 based on the same WACC and the same asset base, how much after-tax operating income did it earn last year? After-tax operating income 181000
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