Question
Penny Worth Hospital is a division of Superior Healthcare that is organized as an investment center. In the past year, the hospital reported an after-tax
Penny Worth 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 $3,570,000. Total interest expense was $1,683,000, and the hospitals tax rate was 20 percent. Hospital assets totaled $35,700,000, and noninterest-bearing current liabilities were $11,628,000. Superior has established a required rate of return equal to 18 percent of invested capital. Calculate the residual income/EVA of Penny Worth Hospital.
(Enter negative answers preceding either - sign, e.g. -45 or in parentheses, e.g. (45).)
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