Question
Kokomo 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
Kokomo 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 $3,600,000. Total interest expense was $1,620,000, and the hospitals tax rate was 35 percent. Hospital assets totaled $34,900,000, and noninterest-bearing current liabilities were $11,300,000. Superior has established a required rate of return equal to 17 percent of invested capital. Calculate the residual income/EVA of Kokomo Hospital. (Enter negative answers preceding either - sign, e.g. -45 or in parentheses, e.g. (45).)
Residual income/EVA | $ |
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