Poseidon Electronics operates 10 stores in Washington, Oregon, and California, selling consumer electronics including home theater systems. The following financial information is available for 2021 and 2020:

		2021		2020
Income from operations		$ 614,250		$ 585,000
Net income		122,850		117,000
Total assets		5,200,000		4,200,000
Noninterest-bearing current liabilities		310,000		308,000
Tax rate		20%		20%
Cost of capital		12%		12%

Management asserts that the increased investment in the companys assets was clearly warranted since income increased. Briefly evaluate this assertion. Type your answer here

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Briefly explain why evaluation in terms of EVA will drive managers to focus on carefully evaluating the investment in assets while this will not be the case if managers are evaluated in terms of growth in profit. Type your answer here

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