Question
Sipacore Waste Management has a subsidiary that disposes of hazardous waste and a subsidiary that collects and disposes of residential garbage. Information related to the
Sipacore 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 Waste | Residential Waste | |||
---|---|---|---|---|
Total assets | $14,076,000 | $80,040,000 | ||
Noninterest-bearing current liabilities | 3,036,000 | 12,144,000 | ||
Net income | 1,718,000 | 6,072,000 | ||
Interest expense | 1,262,000 | 7,384,000 | ||
Required rate of return | 10% | 13% | ||
Tax rate | 15% | 15% |
Calculate EVA for both subsidiaries. Note that since no adjustments for accounting distortions are being made, EVA is equivalent to residual income. (Enter negative answers preceding either - sign, e.g. -45 or in parentheses, e.g. (45).)
Hazardous Waste | Residential Waste | |||
---|---|---|---|---|
EVA | $enter a dollar amount | $enter a dollar amount |
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