Problem:
Consider this case:
Last year, Jaskson Tires reported net sales of $40 million and total operating costs (including depreciation) of $26 million. Jackson Tires has $75 million of investor-supplied capital, which has an after-tax cost of 10%.
Required:
Question: If Jackson Tires's tax rate is 40%, how much value did it's management create or lose for the firm during the year?
Note: Show supporting computations in good form.