Calculate the residual income of Paver Hospital

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Problem - Paver 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 $3,600,000. Total interest expense was $1,610,000, and the hospital's tax rate was 35 percent. Hospital assets totaled $35,400,000, and noninterest-bearing current liabilities were $11,400,000. Superior has established a required rate of return equal to 18 percent of invested capital. Calculate the residual income/EVA of Paver Hospital.

Reference no: EM132756755

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