Here are simplified financial statements for Watervan Corporation:

INCOME STATEMENT
(Figures in $ millions)
Net sales	$ 884
Cost of goods sold	744
Depreciation	34
Earnings before interest and taxes (EBIT)	$ 106
Interest expense	15
Income before tax	$ 91
Taxes	31
Net income	$ 60

BALANCE SHEET
(Figures in $ millions)
	End of Year		Start of Year
Assets
Current assets	$	372			$	318
Long-term assets		264				225
Total assets	$	636			$	543
Liabilities and shareholders equity
Current liabilities	$	197			$	160
Long-term debt		111				124
Shareholders equity		328				259
Total liabilities and shareholders equity	$	636			$	543

The companys cost of capital is 8.50%.

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

Economic value added

$million

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.)

Return on capital

%

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.)

Return on equity

%

d.	Is the company creating value for its shareholders?
	Yes No

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