Problem 4-3 Measuring Performance (LO2) Here are simplified financial statements for Watervan Corporation: INCOME STATEMENT (Figures in $ millions) Net sales Cost of goods sold Depreciation Earnings before interest and taxes (EBIT) Interest expense Income before tax Taxes Net income $882.00 742.00 32.00 $108.00 13.00 $ 95.00 19.95 $ 75.05 BALANCE SHEET (Figures in $ millions) End of Year Start of Year $ 370 260 $ 314 223 $ 630 $ 537 Assets Current assets Long-term assets Total assets Liabilities and shareholders' equity Current liabilities Long-term debt Shareholders' equity Total liabilities and shareholders' equity $ 195 109 326 $ 158 122 257 $ 537 $ 630 The company's cost of capital is 85% 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? million % a. Economic value added b. Return on capital C. Return on equity d. Is the company creating value for its shareholders? %