Unformatted text preview: would be what? Income Invested Capital (Total assets-current liabilities) Answer: 21.67% 4. What is your current residual income if cost of capital is 2% and they can’t reduce their total assets? NOPAT=income – (invested capital *cost of capital %) Answer: 11,400 Pretax income: $500,000 Cash Tax: $100,000 Adjusted Total Assets: $1,000,000 Adjusted Current Liablities: $200,000 10% cost of capital 5. What is the EVA? RI= (pretax- cash tax)- [(Total assets-Current Liabilities)*%cost of capital] Answer: $320,000...
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- Spring '06
- Generally Accepted Accounting Principles, $5, total assets, $5 1, minimum transfer price, total assets-current liabilities