Barton industries has operating income for the year of $3,700,000 and a 25% tax rate. its total invested capital is $18,000,000 and its after-tax percentage cost of capital is 5%. what is the firm's eva? round your answer to the nearest dollar, if necessary.

1,875,000 Economic Value Added

Explanation:

Net Operating Profit After Taxes  - Invested Capital x Weighted Average Cost of Capital = Economic Value added

This represent the return on the shareholders after their investment return is paid. It is the value generated from the investent resources.

3,700,000 x ( 1- 0.25 ) = 2,775,000 Operating Income after taxes

18,000,000 x 5% =         (900,000)  Required Return

                                        1,875,000 Economic Value Added

statement of owner's equity;