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Calculate the economic value added

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Dave's Tires Inc. has been asked by its shareholders to calculate the economic value added (EVA) for the current year. Dave'scontroller has the following information available:

Before-tax profit $6,000,000

Total assets 10,000,000

Current liabilities 2,000,000

Average interest rate on debt 10%

Average tax rate 40%

The company's EVA is:

a. $1,600,000

b. $5,200,000

c. $2,800,000

d. $2,400,000

Reference no: EM131271008

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