Computing eva and comparing performance

Reference no: EM1362865

A company that uses EVA reported the following results for 20X4 and 20X5 (in millions):

..............................................20X4............20X5
Pretax operating Income.......5,698...........5,700
Cash Taxes...........................1,676...........1,600

Average adjusted invested capital was $20,308 million in 20X4 and $18,091 million in 20X5, and the cost of capital was 9% in both 20X4 and 20X5.

1. Compute the Company's EVA for 20X4 and 20X5.

2. Compare the company's performance in creating value for its shareholders in 20X5 with that in 20X4.

Reference no: EM1362865

Questions Cloud

Driving growth and sustainability of mobility industry : Nokia is a world leader in mobile communications, driving the growth and sustainability of the broader mobility industry. Nokia connects people to each other and the information that matters to them with easy-to-use and innovative products like mobil..

Using join sort results alphabetically by customer name : Using Join, list the items each customer ordered where the billing_price was lower than the item price (item, billing_price, and price). Sort the results alphabetically by customer name.

Physical growth and development during middle childhood : Describe normal physical growth and development during middle childhood, and account for the usual variations among children.

In which city hotel room is cheaper and by how much : Suppose the Japanese yen price of one British pound is 163.78 yen for each pound. In which city hotel room is cheaper and by how much.

Computing eva and comparing performance : Compute the Company's EVA for 20X4 and 20X5. Compare the company's performance in creating value for its shareholders in 20X5 with that in 20X4.

Chronic disease to become fatal : What can influence a chronic disease to become fatal? Give at least 3 examples.

Capitation rate projections : What per-member per month (PMPM) rate would be required to break even, ignoring any co-payments? What advice would you provide the primary care group?

Elucidate what will be the effect on the world price of wool : elucidate what will be the effect on the world price of wool. How does the marginal revenue to Australia from an extra unit of wool relate to the price of wool.

Calculating forward prices : A trader owns gold as part of a long-term investment portfolio. The trader can buy gold for $450 per ounce and sell it for $449 per ounce. The trader can borrow funds at 6% per year and invest funds at 5.5% each year.

User Account

All Pages