Question
Hello, only need help with problem #3, need it asap due at 11:55 pm pst. thank you in advance. Operating Income For Segments Xenold, Inc.,
Hello, only need help with problem #3, need it asap due at 11:55 pm pst. thank you in advance.
Operating Income For Segments
Xenold, Inc., manufactures and sells cooktops and ovens through three divisions: Home, Restaurant, and Specialty. Each division is evaluated as a profit center. Data for each division for last year are as follows (numbers in thousands):
Home | Restaurant | Specialty | |
Sales | $4,140 | $3,600 | $2,520 |
Cost of goods sold | 2,900 | 2,640 | 1,700 |
Selling and administrative expenses | 950 | 410 | 320 |
3. Calculate EVA for each division and for Xenold, Inc. In your computations, carry the weighted average cost of capital to three decimal places. If the EVA is negative, enter your answer as a negative amount. Enter the amounts in dollars.
EVA | |
Home | $ fill in the blank |
Restaurant | $ fill in the blank |
Specialty | $ fill in the blank |
Total | $ fill in the blank |
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3. To calculate EVA, first calculate the after-tax cost. After-tax cost = Interest rate (Tax rate x Interest Rate). EVA = After-tax operating income (Weighted average cost of capital x Total capital employed).
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