Calculate the residual income of steeringhospital

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Steering 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 $3,920,000. Total interest expense was $1,848,000, and the hospital's tax rate was 20 percent. Hospital assets totaled $39,200,000, and noninterest-bearing current liabilities were $12,768,000. Superior has established a required rate of return equal to 18percent of invested capital.

Problem 1: Calculate the residual income/EVA of SteeringHospital.

Reference no: EM132982782

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