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Adventure Sports Company makes snowboards, downhill skis, cross-country skis, skateboards, surfboards, and in-line skates. The company has found it beneficial to split operations into two
Adventure Sports Company makes snowboards, downhill skis, cross-country skis, skateboards, surfboards, and in-line skates. The company has found it beneficial to split operations into two divisions based on the climate required for the sport: Snow Sports and Non-Snow Sports. The following divisional information is available for the past year: (Click the icon to view the divisional information.) Compute each division's EVA. Interpret your results. First, enter the formula, and then calculate each divisions EVA. ) X EVAX Divisional information Operating Total Current Sales Income Assets Liabilities Snow Sports ..... $ 5,800,000 $ 881,500 $ 4,100,000 $ 440,000 Non-Snow Sports . .. 8,800,000 1,380,000 6,000,000 690,000 Adventure Sports management has specified a target 14% rate of return. The company's weighted average cost of capital (WACC) is 10%, and its effective tax rate is 33%. Print Done
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