Monfett Manufacturing earned operating income last year as shown in the following income

statement:

Sales

$620,000

Cost of goods sold

316,000

Gross margin

$304,000

Selling and administrative expense 219,000

Operating income

$ 85,000

Less: Income taxes (at 40%)

34,000

Net income

$ 51,000

At the beginning of the year, the value of operating assets was

$263,000. At the end of the year, the value of operating assets was $336,000. Monfett Manufacturing requires a

minimum rate of return of 15%. Total capital employed equal $35

0,000 and actual cost of capital is 6%.

Required:

Calculate the following:

1.Residual income

2.EV