Gallop Company Has Total Assets of $600,000, a 10% Target

Multiple Choice

Gallop Company has total assets of $600,000, a 10% target rate of return, a return on investment of 12%, an 8% weighted average cost of capital, and current liabilities of $100,000. What is Gallop
Company's economic value added assuming that the income tax rate is 40%?

A) $3,200
B) $32,000.
C) -$4,800
D) -$6,800