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Assume Division 1 of the XYZ Company Had the Following

Question 131

Multiple Choice

Assume Division 1 of the XYZ Company had the following results last year. Assume Division 1 of the XYZ Company had the following results last year. Management's required rate of return is 8% and the weighted average cost of capital is 6%. Its effective tax rate is 30%. What is the division's economic value added? A) $60,000 B) $130,000 C) $270,000 D) $430,000 Management's required rate of return is 8% and the weighted average cost of capital is 6%. Its effective tax rate is 30%. What is the division's economic value added?


A) $60,000
B) $130,000
C) $270,000
D) $430,000

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