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Home Q & A Board Other Fields Homework Help Business Accounting
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whitedreamerz whitedreamerz
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A month ago
Jumbo Industries is considering the purchase of equipment costing $80,000. The company has a 12% required minimum rate of return. The equipment is expected to generate $20,000 in additional operating income. Jumbo's tax rate is 25% and its weighted-average cost of capital is 12%. What is the equipment's EVA?

▸ $9,600

▸ $7,200

▸ $2,400

▸ $5,400
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Managerial Accounting

Managerial Accounting


Edition: 4th
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daniboidaniboi
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A month ago
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$5,400

(75% × $20,000) - ($80,000 × 12%) = $5,400
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whitedreamerz Author
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A month ago
Helped a lot
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You make an excellent tutor!
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This site is awesome
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