E18-10 Two companies with very different economic-value-added (EVA) profiles are IHOP, the restaurant chain, and Texaco, the giant oil company. Adapted versions of the two companies' 1999 financial statements are presented here (in millions): IHOP Texaco Balance Sheet Data Total assets.... Interest-bearing debt $520 $28.972 $ 41 All other liabilities.... 253 $ 5.503 14.022 Stockholders' equity. 226 9,447 Total liabilities and equity. $520 $28.972 Income Statement Data Total revenue $273 $34.975 Interest expense. 19 504 All other expenses 222 33,294 Net income.. 32 $ 1.177 Required 1. Before performing any calculations, which company do you think would represent the better investment? Give your reason. 2. Compute the EVA for each company, and then decide which company's stock you would rather hold as an investment. Assume each company's cost of capital is 12%, and round to the nearest million dollars.