finance

QUESTION

CME Group has the following data for the year ending 12/31/07: Net income = $600; Net operating profit after taxes (NOPAT) = $750; Total assets = $2,500; Short-term investments = $200; Stockholders equity = $1,800; Total debt = $700; and Total operating capital = $2,100. Newcrests weighted a
Economic Value Added (EVA) =[NOPAT (Capital * Cost of Capital)] Capital = [Stockholders Equity Total Debt] Capital = [$1,800 $700] Capital = $2,500 Total Assets = [Total Debt Total

ckholders Equity] $2,500 = [$1,800 $700] EVA = [$750 ($2,500 * 5%)] EVA = [$750 $125] Economic Value Added (EVA) = $625

ANSWER:

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