Here are simplified financial statements for Watervan Corporation:

INCOME STATEMENT
(Figures in $ millions)
Net sales	$	891.00
Cost of goods sold		751.00
Depreciation		41.00
Earnings before interest and taxes (EBIT)	$	99.00
Interest expense		22.00
Income before tax	$	77.00
Taxes		26.95
Net income	$	50.05

BALANCE SHEET
(Figures in $ millions)
	End of Year				Start of Year
Assets
Current assets	$	379			$	332
Long-term assets		278				232
Total assets	$	657			$	564
Liabilities and shareholders equity
Current liabilities	$	204			$	167
Long-term debt		118				131
Shareholders equity		335				266
Total liabilities and shareholders equity	$	657			$	564

The companys cost of capital is 8%.

a. Calculate Watervans economic value added (EVA). (Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places.)

b. What is the companys return on capital? (Use start-of-year rather than average capital.) (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

c. What is its return on equity? (Use start-of-year rather than average equity.) (Enter your answer as a percent rounded to 2 decimal places.)

d. Is the company creating value for its shareholders?

• Yes

• No