Question
ClintonHospital is a division of Superior Healthcare that is organized as an investment center. In the past year, the hospital reported an after-tax income of
ClintonHospital is a division of Superior Healthcare that is organized as an investment center. In the past year, the hospital reported an after-tax income of $4,200,000. Total interest expense was $1,980,000, and the hospital's tax rate was20percent. Hospital assets totaled $42,000,000, and noninterest-bearing current liabilities were $13,680,000. Superior has established a required rate of return equal to18percent of invested capital.
Calculate the residual income/EVA ofClintonHospital.(Enter negative answers preceding either - sign, e.g. -45 or in parentheses, e.g. (45).)
Residual income/EVA__________________________$enter Residual income/EVA in dollars
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