ELN Waste Management has a subsidiary that disposes of hazardous waste and a subsidiary that collects and disposes of residential garbage. Information related to the two subsidiaries follows:

a. Calculate ROI for both subsidiaries.
b. Calculate EVA for both subsidiaries. Note that since no adjustments for €œaccounting distortions€ are being made, EVA is equivalent to residualincome.

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Hazardous Residential Waste Waste Total assets Noninterest-bearing current liabilities Net income Interest expense Required rate of retum Tax rate $12,400,000 S71,200,000 2.960.000 1,610,000 1,240,000 10.800.000 6,010,000 7,240,000 14% 4000 14% 40%