I’m working on a mathematics multi-part question and need an explanation and answer to help me learn.
eBook Problem Walk-Through
For 2021, Gourmet Kitchen Products reported $23 million of sales and $18 million of operating costs (including depreciation). The company has $14 million of total invested capital. Its after-tax cost of capital is 10% and its federal-plus-state income tax rate was 25%. What was the firm’s economic value added (EVA), that is, how much value did management add to stockholders’ wealth during 2021? Write out your answer completely. For example, 25 million should be entered as 25,000,000. Round your answer to the nearest dollar, if necessary.