Exercise 1 (8 points) Sales of ABC Company is $650,000; Cost of Goods Sold (COGS) and SG&A expenses represent 62.5% and

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Exercise 1 8 Points Sales Of Abc Company Is 650 000 Cost Of Goods Sold Cogs And Sg A Expenses Represent 62 5 And 1 (35.68 KiB) Viewed 67 times

Exercise 1 (8 points) Sales of ABC Company is $650,000; Cost of Goods Sold (COGS) and SG&A expenses represent 62.5% and 2.5% of sales, respectively. Depreciation is $2,000. Total operating expenses are $50,000. The interest income is $2,000. The total invested capital is $ 800,000. The cost of capital is 15%. The corporate tax rate is 20%. 1. Calculate the net operating profit after taxes (NOPAT). (2 points) 2- Calculate and interpret the return spread. (2 points) 3- Calculate the company's Economic value added (EVA). Interpret. (2 points) 4- If the future EVAs are expected to grow at a constant rate 10% for the next three years, calculate the market value added (MVA). (2 points)