Consider the following information for Marx Electronics:

12/31/2017

12/31/2018

Total assets

$12,983,000

$12,769,500

Noninterest-bearing current liabilities

547,600

595,000

Net income

761,500

955,010

Interest expense

2,281,500

313,710

Tax rate

40%

40%

Required rate of return

10%

12%

12/31/2017 12/31/2018

Total assets $12,983,000 $12,769,500

Noninterest-bearing current liabilities 547,600 595,000

Net income 761,500 955,010

Interest expense 2,281,500 313,710

Tax rate 40% 40%

Required rate of return 10% 12%

(a)

Evaluate the company in terms of residual income (RI), which is equivalent to EVA since there are no adjustments for accounting distortions. (Enter negative answers preceding either - sign, e.g. -45 or in parentheses, e.g. (45).)

2017 2018

Residual income $

$