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rado202 rado202
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1 months ago
Diablo Corporation's Western region operates as an investment center. John Mosby, the division's director, is considering investing in manufacturing equipment with a cost of $120,000. The equipment is expected to generate $35,000 in additional net operating profit. If the weighted average cost of capital is 18%, what is the equipment's EVA?

▸ $21,600

▸ $13,400

▸ $35,000

▸ None of these answer choices are correct
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Managerial Accounting

Managerial Accounting


Edition: 4th
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chemcalchemcal
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1 months ago
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$13,400

EVA = Net operating profit - (invested capital × weighted average cost of capital)
EVA = $35,000 - ($120,000 × 18%) = $13,400
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rado202 Author
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1 months ago
Just got PERFECT on my quiz
rhockeygirl
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Yesterday
Thanks
noodlelicker
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2 hours ago
Good timing, thanks!
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