Hershey Company manufactures, distributes, and sells many items with the Hershey brand name. It also has many other brands including Almond Joy, Milk Duds, and Twizzlers. Its financial results for two recent fiscal years included (in millions): 

1. Suppose that Hershey’s cost of capital is 9.5 percent. Compute the company’s EVA for Years 1 and 2. Assume definitions of after-tax operating income and invested capital as reported in Hershey’s annual reports without adjustments advocated by Stern Stewart or others. 

2. Discuss the change in EVA between Years 1 and 2.

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Year 2 Year 1 $4,836 $4,429 3,975 3,548 88 Revenues Operating expenses Interest expense Income taxes Average invested capital (total assets less current liabilities) 67 280 237 $2,654 $2,764