Question
Handley Hospital is a division of Superior Healthcare that is organized as an investment center. In the past year, the hospital reported an after-tax income
Handley Hospital 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 $4,270,000. Total interest expense was $2,013,000, and the hospitals tax rate was 20 percent. Hospital assets totaled $42,700,000, and noninterest-bearing current liabilities were $13,908,000. Superior has established a required rate of return equal to 18 percent of invested capital. Calculate the residual income/EVA of Handley Hospital. (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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