Eastons Fabric Division has assets of $980,000, current liabilities of $130,000, and net operating income of $196,000.

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Easton’s Fabric Division has assets of $980,000, current liabilities of $130,000, and net operating income of $196,000.

a. What is the Fabric Division’s ROI?
b. If the weighted-average cost of capital is 15 percent, what is the division’s EVA?
c. How might management behavior be different if EVA were used to evaluate performance rather than ROI?

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Financial And Managerial Accounting The Basis For Business Decisions

ISBN: 9781260247930

19th Edition

Authors: Jan Williams, Susan Haka, Mark Bettner, Joseph Carcello

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Question Posted: Jun 17, 2022 02:32 AM

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Eastons Fabric Division has assets of $980,000, current liabilities of $130,000, and net operating income of $196,000.

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a ROI 196000 980000 20 b EVA 196000 15 980000 130000 68500 c If ...View the full answer

Financial And Managerial Accounting The Basis For Business Decisions

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