Question: Here are simplified financial statements for Watervan Corporation: INCOME STATEMENT(Figures in $ millions)Net sales$894.00 Cost of goods sold754.00 Depreciation44.00 Earnings before interest and taxes (EBIT)$96.00

Here are simplified financial statements for Watervan Corporation:

INCOME STATEMENT(Figures in $ millions)Net sales$894.00

Cost of goods sold754.00

Depreciation44.00

Earnings before interest and taxes (EBIT)$96.00

Interest expense25.00

Income before tax$71.00

Taxes14.91

Net income$56.09

BALANCE SHEET(Figures in $ millions)End of YearStart of YearAssetsCurrent assets$382

$338

Long-term assets284

235

Total assets$666

$573

Liabilities and shareholders' equityCurrent liabilities$207

$170

Long-term debt121

134

Shareholders' equity338

269

Total liabilities and shareholders' equity$666

$573

The company's cost of capital is 8.5%.

a.Calculate Watervan's economic value added (EVA).(Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places.)

b.What is the company's return on capital? (Use start-of-year rather than average capital.)(Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

c.What is its return on equity? (Use start-of-year rather than average equity.)(Enter your answer as a percent rounded to 2 decimal places.)

d.Is the company creating value for its shareholders?

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