alleryStart learning →A division earns NOPAT of Rs 90 lakh on capital of Rs 600 lakh at 10% WACC. EVA?
ARs 15 lakh
BRs 30 lakh
CRs 60 lakh
DRs 90 lakh
Answer & Solution
Correct answer: B. Rs 30 lakh
Capital charge is 600 x 10% = 60, so EVA = 90 - 60 = Rs 30 lakh.
Keep practising Divisional Transfer Pricing
Browse all Divisional Transfer Pricing questions for CA Final, or explore more Cost and Management Accounting topics.
Related questions
Group units in tax rates of 25% and 40%. Shifting Rs 10 lakh profit to the lower-tax unit Why can ROI figures be manipulated?A known weakness of ROI as a measure is that it is not what?A division earns Rs 36 lakh profit on Rs 240 lakh invested. Its ROI is what?The cost of capital is best described as what?RONA is 16%, required return 12% and net investment Rs 800 lakh. EVA?NOPAT of Rs 72 lakh on capital of Rs 400 lakh gives RONA of what?When is value created, according to the EVA idea?