Esther Is the Manager of the Sales Department for a Local

Multiple Choice

Esther is the manager of the sales department for a local appliance store. The employees have been voicing their concerns over the current Point-of-Sale (POS) system they use for various aspects of their job. A new machine would afford them the opportunity to better service customers, including real-time pricing and an on-the-spot checkout process. The new POS system would cost $31,828 and would generate $7,442 of Operating Income. The company has a Required Rate of Return of 8% and their tax rate is 23%. If the Weighted Average Cost of Capital (WACC) is 7.7%, then what would their Economic Value Added (EVA) be?

A) $3,184.10
B) $3,279.58
C) $4,895.76
D) $4,991.24