Problem:
For 2012, Everyday Electronics reported $22.5 million of sales and $18 million of operating costs (including depreciation). The company has $15 million of investor-supplied operating capital. Its weighted average cost of capital is 9% and its federal-plus-state income tax rate was 35%.
Required:
Question: What was the firm's Economic Value Added (EVA), that is, how much value did management add to stockholders' wealth during 2012?
Note: Show supporting computations in good form.