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 $15,230,000 $86,140,000 Noninterest-bearing current liabilities 3,340,000 13,230,000 Net income 1,930,000 6,680,000 Interest expense 1,463,000 7,900,000 Required rate of return 13% 10% 40% 40% Tax rate Calculate ROI for both subsidiaries (Round answers to 2 decimal places, e.g. 15.32%) Hazardous Residential Waste Waste ROI LINK TO TEXT LINK TO TEXT Calculate EVA for both subsidiaries. Note that since no adjustments for accounting distortions are being made, EVA is equivalent to residual income. Hazardous Residential Waste Waste EVA