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23 April, 12:36

The ABS company has a capital base of $190 million, an opportunity cost of capital (k) of 20%, a return on assets (ROA) of 10%, and a return on equity (ROE) of 30%.

What is the economic value added (EVA) for ABS?

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  1. 23 April, 16:16
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    Therefore, the Economic value added is - 19.000.000

    Explanation:

    the economic value added (EVA) for ABS is:

    Economic value added = (return on assets x Cost of capital) x Capital base

    = (10%-20%) x190.000.000

    =-19.000.000

    Therefore, the Economic value added is - 19.000.000
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