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Rosnan Industries' 2017 and 2016 balance sheets and income statements are shown below. All of the balance of Cash and Equivalents is an operating asset.
Balance Sheets:
2017
2016
Cash and equivalents
$100
$85
Accounts receivable
275
200
Inventories
375
250
Total current assets
$750
$635
Net plant and equipment
2,000
1,490
Total assets
$2,750
$2,125
Accounts payable
$150
Accruals
75
50
Notes payable
150
Total current liabilities
$375
$210
Long-term debt
450
290
Common stock
1,225
Retained earnings
700
400
Total liabilities and equity
Income Statements:
Sales
$2,000
$1,500
Operating costs excluding depreciation
1,250
1,000
EBITDA
$500
Depreciation and amortization
100
EBIT
$650
$425
Interest
62
45
EBT
$588
$380
Taxes (40%)
235
152
Net income
$353
$228
Dividends paid
$53
$48
Addition to retained earnings
$300
$180
Shares outstanding
180
Price
$20.83
$18.33
WACC
12.00%
Problem 1: Using the financial statements above, what is Rosnan's 2017 market value added (MVA)? Round your answer to the nearest dollar. Do not round intermediate calculations.
Problem 2: Using the financial statements given earlier, what is Rosnan's 2017 economic value added (EVA)? Round your answer to the nearest cent. Do not round intermediate calculations.
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