Reference no: EM132785609

Here are simplified financial statements for Watervan Corporation: INCOME STATEMENT(Figures in $ millions)

Net sales$894.00

Cost of goods sold 754.00

Depreciation 44.00

Earnings before interest and taxes (EBIT)$96.00

Interest expense 25.00

Income before tax$71.00

Taxes 14.91

Net income$56.09

BALANCE SHEET(Figures in $ millions)

  End of Year  Start of Year

Assets       

Current assets $382  $338

 Long-term assets  284  235

 Total assets $666 $573

 Liabilities and shareholders' equity       

Current liabilities $207 $170

 Long-term debt  121 134

 Shareholders' equity  338 269

 Total liabilities and shareholders' equity $666  $573

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.)