The following details are given for painting decision of a car manufacturing company: Net operating profit before interest and tax ₹ 80 crores Equity capital employed ₹ 100 crores 10% Debentures ₹ 40 crores Weighted Aver
CS Executive · Corporate and Management Accounting · PYQS · December 2023
The following details are given for painting decision of a car manufacturing company: Net operating profit before interest and tax ₹ 80 crores Equity capital employed ₹ 100 crores 10% Debentures ₹ 40 crores Weighted Average Cost of Capital 11% If tax rate is 30%, the Economic Value Added (EVA) is:
Answer & Explanation:
The official key records '*'. This question is excluded from automatic grading because the source does not supply an unambiguous valid choice. Official source note: None of the options are correct. Correct answer is ₹ 41.8 crore (Economic Value Added = [NOPAT + Interest ]- Weighted average cost of capital* Capital Employed) [(80-4*.70) + 4] - 140*11%
Topics: Management Accounting
Related Questions in this Topic
- The ratio that explains how efficiently companies use their assets to generate sales is ............
- In the cost Audit report Abnormal Non- Recurring cost relates to :
- Which of the following is not a part of operating budget ?
- If the budget of a company is reviewed and updated at regular intervals, it is known as :
- The difference between variable costs and fixed costs is :