Question: Quantitative Problem: Rosnan Industries' 2017 and 2016 balance sheets and income statements are shown below. All of the balance of Cash and Equivalents is an
Quantitative Problem: Rosnan Industries' 2017 and 2016 balance sheets and income statements are shown below. All of the balance of Cash and Equivalents is an operating asset.
| Balance Sheets: | |||
| 2017 | 2016 | ||
| Cash and equivalents | $100 | $85 | |
| Accounts receivable | 275 | 200 | |
| Inventories | 375 | 250 | |
| Total current assets | $750 | $635 | |
| Net plant and equipment | 2,000 | 1,490 | |
| Total assets | $2,750 | $2,125 | |
| Accounts payable | $150 | $85 | |
| Accruals | 75 | 50 | |
| Notes payable | 150 | 75 | |
| Total current liabilities | $375 | $210 | |
| Long-term debt | 450 | 290 | |
| Common stock | 1,225 | 1,225 | |
| Retained earnings | 700 | 400 | |
| Total liabilities and equity | $2,750 | $2,125 | |
| Income Statements: | |||
| 2017 | 2016 | ||
| Sales | $2,000 | $1,500 | |
| Operating costs excluding depreciation | 1,250 | 1,000 | |
| EBITDA | $750 | $500 | |
| Depreciation and amortization | 100 | 75 | |
| EBIT | $650 | $425 | |
| Interest | 62 | 45 | |
| EBT | $588 | $380 | |
| Taxes (40%) | 235 | 152 | |
| Net income | $353 | $228 | |
| Dividends paid | $53 | $48 | |
| Addition to retained earnings | $300 | $180 | |
| Shares outstanding | 180 | 180 | |
| Price | $25.00 | $22.50 | |
| WACC | 10.00% | ||
Using the financial statements above, what is Rosnan's 2017 market value added (MVA)? Round your answer to the nearest dollar. Do not round intermediate calculations. $
Using the financial statements given earlier, what is Rosnan's 2017 economic value added (EVA)? Round your answer to the nearest cent. Do not round intermediate calculations. $
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