Question
Calculate Return on Investment (ROI) and Economic Value Added (EVA). Use the following data for Eastern Investments Company to calculate ROI and EVA for 2013
Calculate Return on Investment (ROI) and Economic Value Added (EVA).
Use the following data for Eastern Investments Company to calculate ROI and EVA for 2013 and 2014. Analyze the results.
EasternInvestments20132014
Sales $325,000,000$395,000,000
Net Operating Profit After Tax $55,000,000 $60,000,000
NetIncome $35,000,000 $42,000,000
Invested Capital $125,000,000$145,000,000
Adjusted Average Invested Capital $350,000,000$380,000,000
Cost ofCapital 11% 11%
Required:
- Calculate ROI for 2013 and 2014
- Calculate EVA for 2013 and 2014
- Is Eastern Investments performance improving year on year? Why?
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Corporate Finance
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe, Bradford Jordan
12th edition
1259918947, 1260091908, 978-1259918940
