Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Quantitative Problem: Rosnan Industries' 2013 and 2012 balance sheets and income statements are shown below. All of the balance of Cash and Equivalents is an

Quantitative Problem: Rosnan Industries' 2013 and 2012 balance sheets and income statements are shown below. All of the balance of Cash and Equivalents is an operating asset.

Balance Sheets:
2013 2012
Cash and equivalents $100 $85
Accounts receivable 275 200
Inventories 375 250
Total current assets $750 $635
Net plant and equipment 2,000 1,490
Total assets $2,750 $2,125
Accounts payable $150 $85
Accruals 75 50
Notes payable 150 75
Total current liabilities $375 $210
Long-term debt 450 290
Common stock 1,225 1,225
Retained earnings 700 400
Total liabilities and equity $2,750 $2,125

Income Statements:
2013 2012
Sales $2,000 $1,500
Operating costs excluding depreciation 1,250 1,000
EBITDA $750 $500
Depreciation and amortization 100 75
EBIT $650 $425
Interest 62 45
EBT $588 $380
Taxes (40%) 235 152
Net income $353 $228
Dividends paid $53 $48
Addition to retained earnings $300 $180
Shares outstanding 190 190
Price $20.83 $18.33
WACC 12.00%

Using the financial statements above, what is Rosnan's 2013 market value added (MVA)? Round your answer to the nearest dollar. Do not round intermediate calculations. $

Using the financial statements given earlier, what is Rosnan's 2013 economic value added (EVA)? Round your answer to the nearest cent. Do not round intermediate calculations. $

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Free Dollar For College For Dummies

Authors: David Rosen, Caryn Mladen

1st Edition

0764554670, 978-0764554674

More Books

Students also viewed these Finance questions