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scoray [572]
4 years ago
5

Washington Company has two divisions: the Adams Division and the Jefferson Division. The following information pertains to last

year's results: Adams Division Jefferson Division Net (after-tax) income $ 605,000 $ 315,000 Total capital employed 4,000,000 3,250,000 Washington's actual cost of capital was 12%.
Required: 1. Calculate the EVA for the Adams Division. If required, enter a negative EVA as a negative number by entering your answer with the minus sign. 605,000 315,000 4,000,000 3,250,000 2. Calculate the EVA for the Jefferson Division. If required, enter a negative EVA as a negative number by entering your answer with the minus sign.
Business
1 answer:
Gwar [14]4 years ago
4 0

Answer:

$125,000 and -$75,000

Explanation:

The computation of the economic value added is shown below:

As we know that

Economic Value Added is

= Net (after-tax) income - (Capital employed × Actual cost of capital)

For Adams Division, it is

= $605,000 - ($4,000,000 × 12%)

= $605,000 - $480,000

= $125,000

And for Jefferson Division, it is

= $315,000 - ($3,250,000 × 12%)

= $315,000 - $390,000

= -$75,000

We simply applied the above formulas

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3 years ago
The Tradeoff Theory suggests that​ ________. A. with higher costs of financial​ distress, it is optimal for a firm to choose hig
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Answer:

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8 0
1 year ago
Brown Cow Dairy uses the aging approach to estimate Bad Debt Expense. The balance of each account receivable is aged on the basi
mars1129 [50]

<u>Solution and Explanation:</u>

Age of the     Amount             Estimated                    Estimated

Receivables             Uncollectibles  Uncollectible Amounts    

1-30 days old    $12,000   3%                            $360

31-90 days old   $5,000   15%                              $750

more than 90

days old               $3,000   30%                     $900

Estimated year end Balances for Uncollectible Amounts   $2,010

Bad Debt Expense for the year : Estimated Uncollectible Amount - Existing Credit Balance in the Allowance Account

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Answer:

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So the above should be the answer

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