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Managerial Accounting

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Economic Value Added (EVA) for Omni Division Performance Review

MGRACT-@6RHUJ

Omni Inc. is reviewing their divisions using Economic Value Added (EVA). The following information is available for the recent year:

Data for the most recent year:
Asset base \$400,000
After tax operating income \$50,000
Weighted average cost of capital 7.8%
Target Return on Investment 17.5%
Profit margin for the division 22%

What is the dollar amount of the EVA for the most recent year?