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The XYZ Company opened a new manufacturing facility with a capital investment of 10,000,000. The cost to obtain the capital was 8%. In its first year of operations, the facility's net operating profit after taxes was 10,500,000. What was the economic value added (EVA) using the EVA formula?
Suggested Answer: D
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14 comments · newest first
BE
Bernardine
12 months ago
Capital charge is 800,000, so EVA is 9.7M!
MA
Malcolm
12 months ago
Not sure about that calculation, feels off.
KA
Kami
1 year ago
Wait, how did they get 10.5M profit? That seems high!
IE
Iesha
1 year ago
I think the answer is B, seems right to me!
ST
Stevie
1 year ago
EVA is calculated as net profit minus capital charge.
AD
Adelle
1 year ago
I’m pretty confident that the capital charge would be 800,000, so if we subtract that from 10,500,000, we should get the EVA. But I hope I did the math right!
MO
Moon
1 year ago
I practiced a similar question where we had to calculate EVA, and I think the key is to make sure we subtract the capital charge from the net operating profit.
TI
Tina
1 year ago
I think the capital charge is calculated by multiplying the capital investment by the cost of capital, which is 8% in this case. That should help us find the EVA.
SA
Sabrina
1 year ago
I remember the EVA formula is net operating profit after taxes minus the capital charge, but I'm a bit unsure about calculating the capital charge correctly.
ET
Ettie
1 year ago
Hmm, this one seems tricky. I'll need to think carefully about the differences between these cost types.
CO
Corinne
1 year ago
I remember learning about time fences in the context of master scheduling, so I think that's one of the elements they're looking for here. The other options seem less familiar to me.
ME
Meaghan
1 year ago
This is a tricky one. I'll need to carefully read through the question and the options to make sure I don't miss any important details. Gotta be thorough on these exam questions.
BE
Bettye
1 year ago
Okay, I think I've got this. We need to create a pool with monitors that check both the pool members and the corresponding application service ports. The pool members have services on port 80, and the application service is on port 8009.
WI
Willow
1 year ago
I'm not entirely sure about this one. I'll need to reference my notes on RADIUS setup to make sure I understand the right approach.