A result from Extreme Corporation’s most recent year of operations is presented in the following table:
Operating income................................................................................ $ 9,100
Total assets......................................................................................... $14,000
Current liabilities................................................................................ $ 3,600
Sales.................................................................................................... $35,000
Target rate of return............................................................................ 14%
Weighted average cost of capital......................................................... 12%
Tax rate .............................................................................................. 30%
Requirements
1. Calculate the profit margin, asset turnover, and ROI.
2. Calculate the residual income.
3. Calculate the EVA.