Please show working out

11:07 7 .Ill 4G Expert Q&A Done Please show working out 10.7 Pisces pic produced the following statement of financial position (balance sheet) and income statement at the end of the third year of trading: Statement of financial position as at the end of the third year Em ASSETS Non-current assets Property 40.0 Machinery and equipment 80.0 Motor vans 18.6 Marketable investments 9.0 147.6 Current assets Inventories 45.8 Trade receivables 64.6 Cash 1.0 111.4 Total assets 259.0 EQUITY AND LIABILITIES Equity Share capital 80.0 Reserves 36.5 116.5 Non-current liabilities Loan notes 80.0 Current liabilities Trade payables 62.5 Total equity and liabilities 259.0 Income statement for the third year Em Sales revenue 231.5 Cost of sales (143.2) Gross profit 88.3 Wages (43.5) Depreciation of machinery and equipment (14.8) R&D costs (40.0) Allowance for trade receivables (10.5) Operating loss (20.5) Income from investments 0.6 (19.9) Interest payable (0.8) Ordinary loss before taxation (20.7) Restructuring costs (6.0) Loss before taxation (26.7) Tax Loss for the year (26.7) An analysis of the underlying records reveals the following: 1 R&D costs relate to the development of a new product in the previous year. These costs are being written off over a two-year period (starting last year). However, this is a pru- dent approach and the benefits are expected to last for 16 years. 2 The allowance for trade receivables (bad debts) was created this year and the amount of the provision is very high. A more realistic figure for the allowance would be 24 mil- lion. 3 Restructuring costs were incurred at the beginning of the year and are expected to provide benefits for an infinite period. 4 The business has a 7 per cent required rate of return for investors. Required: Calculate the EVA for the business for the third year of trading