Case 53: Royal Resort and Casino Royal Resort and Casino (RRC), a publicly traded company, caters to affluent customers seeking plush surroundings, high-quality food and entertainment, and all the glitz" associated with the best resorts and casinos. RRC consists of three divisions: hotel, gaming, and entertainment. The hotel divi- sion manages the reservation system and lodging operations. Gaming consists of operations, security, and junkets. Junkets offers complimentary air fare and lodging and entertainment at RRC for custom- ers known to wager large sums. The entertainment division consists of restaurants, lounges, catering, and shows. It books lounge shows and top-name entertainment in the theater. Although many of those people attending the shows and eating in the restaurants stay at RRC, customers staying at other hotels and casinos in the area also frequent RRC's shows, restaurants, and gaming operations. The following table disaggregates RRC's total EVA of $12 million into an EVA for each division: 230 ROYAL RESORT AND CASINO EVA by Division (Millions $) Entertainment Hotel $5 $ 10 S40 S120 15% 15% Adjusted accounting profits Invested capital Weighted average cost of capital EVA Gaming $30 S60 15% Total $ 45 $220 15% $ (1) $ (8) $21 $ 12 Based on an analysis of similar companies, it is determined that each division has the same