Reference no: EM13335487

Part I.

East Valley Manufacturing had gross profit of $450,000 and selling & administrative expenses of $275,000 last year. The company also began last year with $1,800,000 of operating assets and ended the year with $1,500,000 of operating assets.

Calculate Return on Investment for East Valley Manufacturing.

Part II.

Saguaro Boat Engines had sales of $6,400,000, cost of goods sold of $4.8 million, and selling & administrative expenses of $650,000 for its most recent year of operation. The company's tax rate is 40%. The total Capital Employed by the firm is $5,000,000. The following information is also available.

Debt/Stock Int Rate

Long-Term Debt $1,000,000 12%

Common Stock $3,000,000 8%

1.In good order and form, prepare an income statement for Saguaro.

2.Calculate EVA.