(solution) Greshak International has the following data for the year ending

(solution) Greshak International has the following data for the year ending

Greshak International has the following data for the year ending 12/31/11: Net income = $300; Net operating profit after taxes (NOPAT) = $500; Total assets = $2,500; Short-term investments = $200; Stockholders’ equity = $1,800; Total liabilities = $700; and Greshak’s total operating capital = $2,100.  Greshak’s weighted average cost of capital (WACC) is 12%. What is its economic value added (EVA)?   MAKE SURE YOU USE AT LEAST 4 DECIMAL PLACES WHERE APPLICABLE.  YOU MUST TYPE IN ANSWER AND ALL OF YOUR WORK TO RECEIVE CREDIT.

Answer:
EVA =
=
= NOPAT-(Capital*cost of capital)
500 – (2100*12%)
248.0000