The companys cost of capital is 8.5%.

a. Calculate Watervans economic value added (EVA). (Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places.)

b. What is the companys return on capital? (Use start-of-year rather than average capital.) (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

c. What is its return on equity? (Use start-of-year rather than average equity.) (Enter your answer as a percent rounded to 2 decimal places.)

d. Is the company creating value for its shareholders?

Here are simplified financial statements for Watervan Corporation: INCOME STATEMENT (Figures in $ millions) Net sales Cost of goods sold Depreciation Earnings before interest and taxes (EBIT) Interest expense Income before tax Taxes Net income $883.00 743.00 33.00 $107.00 14.00 $ 93.00 19.53 $ 73.47 BALANCE SHEET (Figures in $ millions) End of Year Start of Year $ 371 262 $ 633 $ 316 224 $ 540 Assets Current assets Long-term assets Total assets Liabilities and shareholders' equity Current liabilities Long-term debt Shareholders' equity Total liabilities and shareholders' equity $ 196 110 327 $ 633 $ 159 123 258 $ 540 The company's cost of capital is 8.5%. a. Calculate Watervan's economic value added (EVA). (Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places.) b. What is the company's return on capital? (Use start-of-year rather than average capital.) (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) c. What is its return on equity? (Use start-of-year rather than average equity.) (Enter your answer as a percent rounded to 2 decimal places.) d. Is the company creating value for its shareholders? Answer is complete but not entirely correct. a. S b. Economic value added Return on capital Return on equity Is the company creating value for its shareholders? 25.37 million 1.40 % 38.00 X % C. d. Yes