Cato Waste Management has a subsidiary that disposes of hazardous waste and a subsidiary that collects and disposes of residential garbage. Information related to the two subsidiaries follows:

		Hazardous Waste		Residential Waste
Total assets		$15,300,000		$87,000,000
Noninterest-bearing current liabilities		3,300,000		13,200,000
Net income		1,866,000		6,600,000
Interest expense		1,370,000		8,024,000
Required rate of return		10%		13%
Tax rate		35%		35%

Calculate ROI for both subsidiaries. (Round answers to 2 decimal places, e.g. 15.32%.)

		Hazardous Waste		Residential Waste
ROI		enter percentages rounded to 2 decimal places %		enter percentages rounded to 2 decimal places %

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Calculate EVA for both subsidiaries. Note that since no adjustments for accounting distortions are being made, EVA is equivalent to residual income. (Enter negative answers preceding either - sign, e.g. -45 or in parentheses, e.g. (45).)

		Hazardous Waste		Residential Waste
EVA		$enter a dollar amount		$enter a dollar amount

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Which subsidiary has added the most to shareholder value in the last year?

select a subsidiary Hazardous WasteResidential Waste has added the most to shareholder value.

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Based on the limited information, which subsidiary is the best candidate for expansion?

select a subsidiary Residential WasteHazardous Waste is the best candidate for expansion.