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Evaluate the two divisions in terms of economic value added

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Reference no: EM13583029

Spectrum Book Company has two divisions: The Brick and Mortar division sells books through more than 100 bookstores throughout the United States; the Internet division was formed 18 months ago and sells books via the Internet. Data for the past year are:
Brick and Mortar
Division
Internet
Division
Total assets
$162,700,000
$15,520,000
Noninterest-bearing current liabilities
7,071,000
2,534,000
Net income (loss)
27,720,000
(1,138,000 )
Interest expense
1,275,000
411,100
Tax rate
40%
0
Cost of capital
10%
12%

Evaluate the two divisions in terms of economic value added (EVA). (Enter negative answers preceeding either - sign, e.g. -45 or in parentheses, e.g. (45).)
Brick & Mortar
Division
Internet
Division
EVA
$
$

Reference no: EM13583029

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