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Sanchez Company Reports the Following Information The Adjusted Figures Reflect Adjustments Used by Stern Stewart

Question 58

Multiple Choice

Sanchez Company reports the following information:
Net operating profit after taxes $500,000Adjusted net operating profit after taxes $670,000Average invested capital $500,000Adjusted average invested capital $700,000 After-taxcost of capital10%\begin{array} { l } \text {Net operating profit after taxes }&\$500,000 \\ \text {Adjusted net operating profit after taxes }&\$670,000 \\ \text {Average invested capital }&\$ 500,000\\ \text {Adjusted average invested capital }&\$700,000 \\ \text { After-taxcost of capital}&10\%\\\end{array}

The adjusted figures reflect adjustments used by Stern Stewart & Company.What is the EVA for Sanchez Company?


A) $430,000
B) $450,000
C) $600,000
D) $620,000

Correct Answer:

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