Problem 4-3 Measuring Performance (LO2) Here are simplified financial statements for Watervan Corporation: INCOME STATEMENT (Figures in 5 millions) Net sales Cost of goods sold Depreciation Earnings before interest and taxes (EBIT) Interest expense Income before tax Taxes Net income $900.00 760.00 50.00 $ 90.00 31.00 $ 59.00 12.39 $46.61 BALANCE SHEET (Figures in 5 millions) End of Year Start of Year $ 388 296 $ 350 241 Assets Current assets Long-term assets Total assets Liabilities and shareholders' equity Current liabilities Long-term debt Shareholders' equity Total liabilities and shareholders' equity $ 684 $ 591 $ 213 127 344 $ 176 140 256 $ 684 $ 572 The company's cost of capital is 8.5% The company's cost of capital is 8.5% Q. 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 calculationis, 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? W milion 3 Economic value added b. Return on capital C Return on equity d. is the company creating value for its shareholders