Use the information from Figure 13-2 and complete the missing information
What will be an ideal response?
Figure 13-2 Bartlett Packaging Inc., Economic Value Added (EVA)
Amounts in $ thousands, except percentages
Operating profit (EBIT) 15,000
tax rate (t) 30.00%
EBIT × (1 - t) = NOPAT 10,500
Invested capital 25,000
Cost of capital (Kc) 11.00%
Capital charge = invested capital × Kc 2,750
EVA = NOPAT - capital charge 7,750
ROCE = NOPAT/invested capital 42.00%
ROCE - Kc 31.00%
Invested capital 25,000
EVA = (ROCE - Kc) × invested capital 7,750
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