Reference no: EM132472636
INCOME STATEMENT(Figures in $ millions)
Net sales $897.00
Cost of goods sold 757.00
Depreciation 47.00
Earnings before interest and taxes (EBIT) $93.00
Interest expense 28.00
Income before tax $65.00
Taxes 13.65
Net income $51.35
BALANCE SHEET(Figures in $ millions)
End of Year /Start of Year
Assets
Current assets $385 $344
Long-term assets 290 238
Total assets . $675 $582
Liabilities and shareholders' equity
Current liabilities . $210 $173
Long-term debt 124 137
Shareholders' equity . 341 272
Total liabilities and shareholders' equity $675 $582
- The company's cost of capital is 8.5%.
Question a. Calculate Watervan's economic value added (EVA). (Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places.)
Question b. What is the company's return on capital? (Use start-of-year rather than average capital.) (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
Question c. What is its return on equity? (Use start-of-year rather than average equity.) (Enter your answer as a percent rounded to 2 decimal places.)
Question d. Is the company creating value for its shareholders?
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