The Tandem Division of the Great Adventures Cycles Company Had

Multiple Choice

The Tandem division of the Great Adventures Cycles Company had the following results last year (in thousands) . $$\begin{array} { | l | r r | } \hline \text { Sales } & \$ & 4,000,000 \\\hline \text { Operating incare } & \$ & 480,000 \\\hline \text { Total assets } & \$ & 2,000,000 \\\hline \text { Current liabilities } & \$ & 300,000 \\\hline\end{array}$$ Management's target rate of return is 10% and the weighted average cost of capital is 8%.Its effective tax rate is 40%.
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What is the Tandem division's Economic Value Added (EVA) ?

A) $136,000
B) $152,000
C) $280,000
D) $288,000