Count On It Marketing Inc. has an ROCE of 21%, a WACC of 9.35%, and in

Count On It Marketing Inc. has an ROCE of 21%, a WACC of 9.35%, and invested capital of $250,000. With this information estimate the firm’s economic value added (EVA).

A) $24,639
B) $29,125
C) $41,621
D) There is not enough information to answer this question.

ANSWER

B
Explanation: B) EVA = (ROCE-WACC) * invested capital = (.21 – .0935 ) * $250,000 = $29,125.