1. Non-current assets (a) Fixed Assets 1,00,00,000 2. Current Assets (a) Inventories ) Raw Material 86,400 (1) Finished Goods 1,71,360 (b) Account receivable 4,29.300 (c) Cash 4,940 TOTAL 1,06,92,000 Statement of Profit of ABC Limited Sales 28,62.000 Less: Operating Expenses 11,48,400 EBIT 17,13,600 Less: Tax Expensen 6,85,440 NOPAT 10,28,160 The average rate of return on similar types of companies is 20% while risk free return is 12.5%. Rate of return as charged by bank is 18% and the tax rate is 40%. Calculate Economic Value Added.

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
icon
Related questions
Question
Balance Sheet ot ABC Limited
as at 31st March, 2017
1. EQUITY AND LIABILITIES
Rs.
1. Shareholder's Funds
Equity
40,00,000
2. Non-Current Liabilities
Long Term Debt
60,00,000
3. Current Liabilities
(a) Account Payables
2,08.000
(b) Bank Overdrafta
4,84,000
TOTAL
1,06,92,000
II ASSETS
1. Non-current assets
(a) Fixed Assets
1,00,00,000
2. Current Assets
(a) Inventories
() Raw Material
86,400
(1) Finished Goods
1,71,360
(b) Account receivable
4,29,300
(c) Cash
4,940
TOTAL
1,06,92,000
Statement of Profit of ABC Limited
Sales
28,62.000
Less: Operating Expenses
11,48,400
EBIT
17,13,600
Less: Tax Expenses
6,85,440
NOPAT
10,28,160
The average rate of return on similar types of companies is 20% while risk free return is 12.5%. Rate of return
as charged by bank is 18% and the tax rate is 40%.
Calculate Economic Value Added.
Transcribed Image Text:Balance Sheet ot ABC Limited as at 31st March, 2017 1. EQUITY AND LIABILITIES Rs. 1. Shareholder's Funds Equity 40,00,000 2. Non-Current Liabilities Long Term Debt 60,00,000 3. Current Liabilities (a) Account Payables 2,08.000 (b) Bank Overdrafta 4,84,000 TOTAL 1,06,92,000 II ASSETS 1. Non-current assets (a) Fixed Assets 1,00,00,000 2. Current Assets (a) Inventories () Raw Material 86,400 (1) Finished Goods 1,71,360 (b) Account receivable 4,29,300 (c) Cash 4,940 TOTAL 1,06,92,000 Statement of Profit of ABC Limited Sales 28,62.000 Less: Operating Expenses 11,48,400 EBIT 17,13,600 Less: Tax Expenses 6,85,440 NOPAT 10,28,160 The average rate of return on similar types of companies is 20% while risk free return is 12.5%. Rate of return as charged by bank is 18% and the tax rate is 40%. Calculate Economic Value Added.
Expert Solution
steps

Step by step

Solved in 2 steps

Blurred answer
Knowledge Booster
Ratio Analysis
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Essentials Of Investments
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
FUNDAMENTALS OF CORPORATE FINANCE
FUNDAMENTALS OF CORPORATE FINANCE
Finance
ISBN:
9781260013962
Author:
BREALEY
Publisher:
RENT MCG
Financial Management: Theory & Practice
Financial Management: Theory & Practice
Finance
ISBN:
9781337909730
Author:
Brigham
Publisher:
Cengage
Foundations Of Finance
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education