Zumbahlen Inc. has the following balance sheet. Its EBIT is $300 and tax rate is 40%. Also, the weighted averag cost of capital of Jumbahlen Inc. is 10%. 1. How much total net operating capital does the firm have? 2.Calculate the Economic Value Added (EVA).
Zumbahlen Inc. has the following balance sheet. Its EBIT is $300 and tax rate is 40%. Also, the weighted averag cost of capital of Jumbahlen Inc. is 10%. 1. How much total net operating capital does the firm have? 2.Calculate the Economic Value Added (EVA).
| Cash | 20 | Accounts payable | 30 |
| Short-term investments | 50 | Accruals | 50 |
| Accounts receivable | 20 | Notes payable | 30 |
| Inventory | 60 | Current liabilities | 110 |
| Current assets | 150 | ||
| Long-term debt | 70 | ||
| Gross fixed assets | 140 | Common stock | 30 |
| Accumulated deprec. | 40 | Retained earnings | 40 |
| Net fixed assets | 100 | Total common equity | 70 |
| Total assets | 250 | Total liab. & equity | 250 |
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