Problem 4-3 Measuring Performance (LO2) Here are simplified financial statements for Watervan Corporation INCOME STATEMENT (Figures in $ millions) $897.00 757.00 47.00 $93.00 28.00 65.00 22.75 $ 42.25 Net sales Cost of goods sold Depreciation Earnings before interest and taxes (EBIT) Interest expense Income before tax Taxes Net income BALANCE SHEET (Figures in $ millions) End of Year Start of Year Assets Current assets Long-term assets $ 385 344 238 675 582 290 Total assets Liabilities and shareholders' equity Current liabilities Long-term deb Shareholders' equity $ 210 124 341 $ 675 173 137 272 $ 582 Total liabilities and shareholders' equity The company's cost of capital is 8% a. Calculate Watervan's economic value added (EVA). (Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places.) Economic value added milion 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.) Return on capital% 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.) Return on equity Problem 4-3 Measuring Performance (LO2) Here are simplified financial statements for Watervan Corporation INCOME STATEMENT (Figures in $ millions) $897.00 757.00 47.00 $93.00 28.00 65.00 22.75 $ 42.25 Net sales Cost of goods sold Depreciation Earnings before interest and taxes (EBIT) Interest expense Income before tax Taxes Net income BALANCE SHEET (Figures in $ millions) End of Year Start of Year Assets Current assets Long-term assets $ 385 344 238 675 582 290 Total assets Liabilities and shareholders' equity Current liabilities Long-term deb Shareholders' equity $ 210 124 341 $ 675 173 137 272 $ 582 Total liabilities and shareholders' equity The company's cost of capital is 8% a. Calculate Watervan's economic value added (EVA). (Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places.) Economic value added milion 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.) Return on capital% 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.) Return on equity