3. Measuring Performance. Here are simplified financial statements for Watervan Corporation INCOME STATEMENT (Figures in $ millions) $881 Net sales 741 Cost of goods sold 31 Depreciation 109 Earnings before interest and taxes (EBIT) 12 Interest expense 97 Income before tax 20 Taxes 77 Net income BALANCE SHEET (Figures in $ millions) End of Year Start of Year $369 258 $627 $312 222 $534 Assets Current assets Long-term assets Total assets Liabilities and shareholders' equity Current liabilities Long-term debt Shareholders' equity Total liabilities and shareholders' equity $194 108 325 $627 $157 121 256 $534 The company's cost of capital is 8.5%. (L04-2) a. Calculate Watervan's economic value added (EVA). b. What is the company's return on capital? (Use start-of-year rather than average capital.) c. What is its return on equity? (Use start-of-year rather than average equity.) d. Is the company creating value for its shareholders? Dents economie volite da dd