Reference no: EM132545377
Question - Residual income, ROI, and EVA
The following selected data pertain to Brannard Company's Construction Division for last year.
Sales $2,380,000
Variable costs $1,428,000
Traceable fixed costs $238,000
Average invested capital (assets) $3,570,000
Current liabilities $238,000
Required rate of return 15%
Marginal tax rate 36%
Weighted average cost of capital 12%
Required -
1. Calculate the residual income.
2. Calculate the return on investment.
3. Calculate the economic value added.