Here are simplified financial statements for Watervan Corporation:

INCOME STATEMENT
(Figures in $ millions)
Net sales	$ 883
Cost of goods sold	743
Depreciation	33
Earnings before interest and taxes (EBIT)	$ 107
Interest expense	14
Income before tax	$ 93
Taxes	32
Net income	$ 61

BALANCE SHEET
(Figures in $ millions)
	End of Year				Start of Year
Assets
Current assets	$	371			$	316
Long-term assets		262				224
Total assets	$	633			$	540
Liabilities and shareholders’ equity
Current liabilities	$	196			$	159
Long-term debt		110				123
Shareholders’ equity		327				258
Total liabilities and shareholders’ equity	$	633			$	540

The company’s cost of capital is 7.50%.

a.	Calculate Watervan’s 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 company’s 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