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a. Calculate Watervan's economic value added (EVA). (Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places.) 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.)

a. Calculate Watervan's economic value added (EVA). (Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places.) 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.)

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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INCOME STATEMENT (Figures in $ millions) Net sales $888.00 Cost of goods sold Depreciation Earnings before interest and taxes (EBIT) $102.00 748.00 38.00 Interest expense 19.00 Income before tax $ 83.00 Таxes 17.43 Net income $ 65.57 BALANCE SHEET (Figures in $ millions) Start End of of Year Year Assets Current assets $ 376 $ 326 Long-term assets 272 229 Total a3sets $ 648 $ 555 Liabilities and shareholders' equity $ 164 128 263 Current liabilities $ 201 Long-term debt Shareholders' equity 115 332 Total liabilities and shareholders' equity $ 648 $ 555
Transcribed Image Text:INCOME STATEMENT (Figures in $ millions) Net sales $888.00 Cost of goods sold Depreciation Earnings before interest and taxes (EBIT) $102.00 748.00 38.00 Interest expense 19.00 Income before tax $ 83.00 Таxes 17.43 Net income $ 65.57 BALANCE SHEET (Figures in $ millions) Start End of of Year Year Assets Current assets $ 376 $ 326 Long-term assets 272 229 Total a3sets $ 648 $ 555 Liabilities and shareholders' equity $ 164 128 263 Current liabilities $ 201 Long-term debt Shareholders' equity 115 332 Total liabilities and shareholders' equity $ 648 $ 555
xternal_browser=0&launchUrl=https% Check my work mode : This shows what is correct or incorrect for the work you have completed so far. It does not indicate completi Ret The company's cost of capital is 8.5%. a. Calculate Watervan's economic value added (EVA). (Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places.) 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.) 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.) d. Is the company creating value for its shareholders? X Answer is complete but not entirely correct. Economic value added $ 2,194.23 8 million a. b. Retun on capital 37.50 8 % Return on equity 24.93 O % C. d. Is the company creating value for its shareholders? Yes < Prev 6 of 8 Next > rch
Transcribed Image Text:xternal_browser=0&launchUrl=https% Check my work mode : This shows what is correct or incorrect for the work you have completed so far. It does not indicate completi Ret The company's cost of capital is 8.5%. a. Calculate Watervan's economic value added (EVA). (Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places.) 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.) 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.) d. Is the company creating value for its shareholders? X Answer is complete but not entirely correct. Economic value added $ 2,194.23 8 million a. b. Retun on capital 37.50 8 % Return on equity 24.93 O % C. d. Is the company creating value for its shareholders? Yes < Prev 6 of 8 Next > rch
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