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Worldatwork CECP Exam - Topic 1 Question 20 Discussion

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?
D) 9,700,000
A) 500,000
B) 840,000
C) 8,000,000

Worldatwork CECP Exam - Topic 1 Question 20 Discussion

Actual exam question for Worldatwork's CECP exam
Question #: 20
Topic #: 1
[All CECP Questions]

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?

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Suggested Answer: D

by Casie at May 09, 2022, 01:44 PM

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Bernardine
7 months ago
Capital charge is 800,000, so EVA is 9.7M!
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Malcolm
7 months ago
Not sure about that calculation, feels off.
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Kami
8 months ago
Wait, how did they get 10.5M profit? That seems high!
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Iesha
8 months ago
I think the answer is B, seems right to me!
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Stevie
8 months ago
EVA is calculated as net profit minus capital charge.
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Adelle
8 months 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!
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Moon
8 months 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.
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Tina
8 months 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.
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Sabrina
8 months 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.
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Ettie
8 months ago
Hmm, this one seems tricky. I'll need to think carefully about the differences between these cost types.
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Corinne
9 months 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.
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Meaghan
9 months 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.
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Bettye
9 months 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.
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Willow
9 months 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.
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