Problem:
Spirit Corp. has $40 million in total operating capital. The company's WACC is 14%. The company has the following income statement.
- Sales = $50 million
- O&M = $30 million
- EBIT = $20 million
- Interest expense = $6 million
- EBT = $14 million
- Taxes = 35% or $4.9 million
- Net income = $9.1 million
Required:
Question: What is Spirit's EVA?
Note: Provide support for your underlying principle.