EVA is calculated by subtracting:a.Total expenses from total revenueb.Cost of capital from net operating profit after tax (NOPAT)c.Total assets from total liabilitiesd.Net income from shareholders' equity

If a company's NOPAT (Net Operating Profit After Tax) is $500,000, and its Capital Employed is $2,000,000, and the WACC is 8%, what is the company's EVA?

In calculating the firm’s Economic Value Added (EVA),Group of answer choicesthe net operating profit after tax is used to offset the capital employed.the capital employed refers to the total equity of the firm.the capital employed is the same as the total asset value of the firm.the weighted average cost of capital (WACC) is the dollar amount of financing cost incurred by the firm.

EVA is a measure of the:a.Market value of a company's sharesb.Profitability of a company's operationsc.Total value of a company's assetsd.Return on investment (ROI)

EVA is considered a valuable measure of financial performance because it:a.Reflects the market value of a company's sharesb.Considers the cost of capital in evaluating profitabilityc.Calculates the net income available to common shareholdersd.Measures the total value of a company's assets

As a financial manager, you are provided the following information:• The investment is financed by $50,000 ordinary shares, $30,000 preference shares and$20,000 bank loan.• The firm’s weighted average cost of capital is 6%.• The investment will generate net operating profit after tax (NOPAT) of $30,000.• The firm’s tax rate is 20%.Calculate the Economic Value Added (EVA) of the following investment. Should the firmaccept or reject the investment? Explain your reason(s).(4 marks