Here are simplified financial statements for Watervan Corporation:

The company's cost of capital is 8.5%.
a. Calculate Watervan's economic value added (EVA).
b. What is the company's return on capital? (Use start-of-year rather than average capital.)
c. What is its return on equity? (Use start-of-year rather than average equity.)
d. Is the company creating value for its shareholders?

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INCOME STATEMENT (Figures in S millions) Net sales Cost of goods sold Depreciation Earnings before interest and taxes (EBIT) Interest expense Income before tax Taxes Net income 881 741 31 109 12 97 34 63 BALANCE SHEET Figures in $ millions) End of YearStart of Year Assets 369 258 627 Current assets 312 Long-term assets Total assets 534 Liabilities and shareholders' equity Current liabilities Long-term debt Shareholders' equity 194 108 325 627 157 121 256 534 Total liabilities and shareholders' equity