Leesum Company has two divisions: the Leone Division and the Letwo Division. The following information pertains...
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Leesum Company has two divisions: the Leone Division and the Letwo Division. The following information pertains to last year's results: Leone Division Letwo Division $623,150 4,800,000 Net (after-tax) income Total capital employed Leesum's actual cost of capital was 12%. Required: $359,100 3,672,500 1. Calculate the EVA for the Leone Division. If required, enter a negative EVA as a negative number by entering your answer with the minus sign. 2. Calculate the EVA for the Letwo Division. If required, enter a negative EVA as a negative number by entering your answer with the minus sign. 3. Conceptual Connection: Is each division creating or destroying wealth? Leone Division Letwo Division Leesum Company has two divisions: the Leone Division and the Letwo Division. The following information pertains to last year's results: Leone Division Letwo Division $623,150 4,800,000 Net (after-tax) income Total capital employed Leesum's actual cost of capital was 12%. Required: $359,100 3,672,500 1. Calculate the EVA for the Leone Division. If required, enter a negative EVA as a negative number by entering your answer with the minus sign. 2. Calculate the EVA for the Letwo Division. If required, enter a negative EVA as a negative number by entering your answer with the minus sign. 3. Conceptual Connection: Is each division creating or destroying wealth? Leone Division Letwo Division
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Calculate Economic Value Added EVA for each division Leone Division EVA ROCE Net Income Total Capita... View the full answer
Related Book For
Managerial Accounting The Cornerstone Of Business Decision Making
ISBN: 9780357715345
8th Edition
Authors: Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
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