Use the following information for the next 3 questions.
Chicago Division has a required rate of return of 15%. The weighted average cost of capital is 10%. Information for Chicago Divisions operations over the past 2 years follows.
-What was the Chicago Division EVA for 20x5?
A) $3,960
B) $11,960
C) $20,460
D) $27,800

Question

Use the following information for the next 3 questions.
Chicago Division has a required rate of return of 15%. The weighted average cost of capital is 10%. Information for Chicago Divisions operations over the past 2 years follows. 
-What was the Chicago Division EVA for 20x5?
A) $3,960 
B) $11,960 
C) $20,460 
D) $27,800

Quizplus · Accepted Answer

The Chicago Division EVA for 20x5 is $11,960. This is calculated by taking the net operating profit after taxes (NOPAT) of $27,800 and subtracting the weighted average cost of capital (WACC) of 15.9% multiplied by the invested capital of $10,840.

Use the Following Information for the Next 3 Questions