Question
The Kennel Book Company has two divisions: The Brick and Mortar division sells books through more than 100 bookstores throughout the United States; the Internet
The Kennel Book Company has two divisions: The Brick and Mortar division sells books through more than 100 bookstores throughout the United States; the Internet division was formed 18 months ago and sells books via the Internet. Data for the past year are:
Brick and Mortar Division | Internet Division | ||||
---|---|---|---|---|---|
Total assets | $136,080,000 | $13,003,200 | |||
Noninterest-bearing current liabilities | 5,896,800 | 2,116,800 | |||
Interest expense | 1,058,400 | 351,540 | |||
Net income (loss) | 23,360,400 | (945,000 | ) | ||
Tax rate | 20% | 0 | |||
Cost of capital | 10% | 12% |
Evaluate the two divisions in terms of economic value added (EVA). (Enter negative answers preceding either - sign, e.g. -45 or in parentheses, e.g. (45).)
Brick & Mortar Division | Internet Division | |||
---|---|---|---|---|
EVA | $enter a dollar amount | $enter a dollar amount |
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