Items 1 and 2 are based on the following information:
The following information is available for Armstrong Enterprises for 2005:
|
Net operating profit (income) after taxes |
$36,000,000 |
|
Depreciation expense |
15,000,000 |
|
Change in net working capital |
10,000,000 |
|
Capital expenditures |
12,000,000 |
|
Invested capital (total assets – current liabilities) |
100,000,000 |
|
Weighted average cost of capital |
10% |
What is the amount of the economic value added (EVA)?
- $20,000,000
- $26,000,000
- $15,000,000
- $36,000,000
What is the free cash flow for 2005?
- $36,000,000
- $30,000,000
- $29,000,000
- $26,000,000