The following data relates to the ABC Corporation and its A Division. A Division sales P 8,000,000A Division operating income P 480,000A Division total assets P 2,000,000A Division current liabilities P 600,000Corporate target rate of return14%Corporate weighted average cost of capital10%Corporate effective tax rate30% What is the A Divisions Economic Value Added (EVA)?

Economic value added is one of the performance of the business. It shows how much operating profits…

Answered: The following data relates to the ABC…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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The following data relates to the ABC Corporation and its A Division.

A Division sales	P 8,000,000
A Division operating income	P 480,000
A Division total assets	P 2,000,000
A Division current liabilities	P 600,000
Corporate target rate of return	14%
Corporate weighted average cost of capital	10%
Corporate effective tax rate	30%

What is the A Divisions Economic Value Added (EVA)?

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