Problem 12-7

ELN Waste Management has a subsidary that disposes of hazardous waste and a subsidary that collects and disposes of residential garbage.

Calculate ROI for both subsidaries.

Calculate EVA for both subsidaries.

Problem 12-7 ELN Waste Management has a subsidiary that disposes of hazardous waste and a subsidiary that collects and disposes of residential garbage. Information related to the two subsidiaries follows: Hazardous Residential Waste Waste Total assets $15,290,000 $86,300,000 Noninterest-bearing current liabilities 3,270,000 13,200,000 Net income 1,930,000 6,660,000 Interest expense 1,395,000 8,100,000 13% Required rate of return 10% 40% 40% Tax rate Calculate ROI for both subsidiaries. (Round answers to 2 decimal places, e.g. 15.32%.) Residential Hazardous Waste Waste ROI LINK TO TEXT LINK TO TEXT Calculate EVA for both subsidiaries. Note that since no adjustments for accounting distort are being made, EVA is equivalent to residual income Hazardous Residential Waste Waste EVA