Question: Hello, only need help with problem #3, need it asap due at 11:55 pm pst. thank you in advance. Operating Income For Segments Xenold, Inc.,

Hello, only need help with problem #3, need it asap due at 11:55 pm pst. thank you in advance.

Operating Income For Segments

Xenold, Inc., manufactures and sells cooktops and ovens through three divisions: Home, Restaurant, and Specialty. Each division is evaluated as a profit center. Data for each division for last year are as follows (numbers in thousands):

Home Restaurant Specialty
Sales $4,140 $3,600 $2,520
Cost of goods sold 2,900 2,640 1,700
Selling and administrative expenses 950 410 320

3. Calculate EVA for each division and for Xenold, Inc. In your computations, carry the weighted average cost of capital to three decimal places. If the EVA is negative, enter your answer as a negative amount. Enter the amounts in dollars.

EVA
Home $ fill in the blank
Restaurant $ fill in the blank
Specialty $ fill in the blank
Total $ fill in the blank

Feedback Area

Feedback

3. To calculate EVA, first calculate the after-tax cost. After-tax cost = Interest rate (Tax rate x Interest Rate). EVA = After-tax operating income (Weighted average cost of capital x Total capital employed).

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!