(Learning Objective 5: Using economic value added to measure corporate performance) Two companies with different economic-value-added (EVA)...

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(Learning Objective 5: Using economic value added to measure corporate performance) Two companies with different economic-value-added (EVA®) profi les are Barton Oil Pipeline Incorporated and Crompton Bank Limited. Adapted versions of the two companies’

fi nancial statements are presented here (in millions):

❙ Requirements 1. Before performing any calculations, which company do you think represents the better investment? Give your reason.

2. Compute the EVA® for each company and then decide which company’s shares you would rather hold as an investment. Assume both companies’ cost of capital is 8.5% and use unadjusted net income in your calculations.

(Group B)

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Related Book For  book-img-for-question

Financial Accounting International Financial Reporting Standards

ISBN: 9780273777809

1st Global Edition

Authors: Walter T Harrison, Charles Horngren, Bill Thomas, Themin Suwardy

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