Calculate the residual income of dynatech hospital

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Dynatech Hospital is a division of Superior Healthcare that is organized as an investment center. In the past year, the hospital reported an after-tax income of $2,800,000. Total interest expense was $1,320,000, and the hospital's tax rate was 20 percent. Hospital assets totaled $28,000,000, and noninterest-bearing current liabilities were $9,120,000. Superior has established a required rate of return equal to 18 percent of invested capital.

Problem 1: Calculate the residual income / EVA of Dynatech Hospital

Reference no: EM132789837

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