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Quantitative Problem: Rosnan Industries' 2020 and 2019 balance sheets and income statements are shown below. All of the balance of Cash and Equivalents is an
Quantitative Problem: Rosnan Industries' 2020 and 2019 balance sheets and income statements are shown below. All of the balance of Cash and Equivalents is an operating asset.
Balance Sheets: | |||
2020 | 2019 | ||
Cash and equivalents | $100 | $85 | |
Accounts receivable | 275 | 200 | |
Inventories | 375 | 250 | |
Total current assets | $750 | $535 | |
Net plant and equipment | 2,300 | 1,590 | |
Total assets | $3,050 | $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 | 1,000 | 400 | |
Total common equity | $2,225 | $1,625 | |
Total liabilities and equity | $3,050 | $2,125 |
Income Statements: | |||
2020 | 2019 | ||
Sales | $2,285 | $1,585 | |
Operating costs excluding depreciation | 1,250 | 1,000 | |
EBITDA | $1,035 | $585 | |
Depreciation and amortization | 100 | 75 | |
EBIT | $935 | $510 | |
Interest | 63 | 46 | |
EBT | $872 | $464 | |
Taxes (25%) | 218 | 116 | |
Net income | $654 | $348 | |
Dividends paid | $54 | $48 | |
Addition to retained earnings | $600 | $300 | |
Shares outstanding | 100 | 100 | |
Price | $26.00 | $23.50 | |
WACC | 11.00% |
Using the financial statements above, what is Rosnan's 2020 market value added (MVA)? Do not round intermediate calculations. Round your answer to the nearest dollar.
$
Using the financial statements given earlier, what is Rosnan's 2020 economic value added (EVA)? Do not round intermediate calculations. Round your answer to the nearest cent.
$
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