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While reviewing last year's performance outcomes for comparison to this year, Donna finds several pieces of missing. Apparently, a virus attacked select components of the
While reviewing last year's performance outcomes for comparison to this year, Donna finds several pieces of missing. Apparently, a virus attacked select components of the system's memory, and the back-up information was too difficult to extract from the file. She knows that all divisions use the corporate tax rate of (26%), minimum rate of return (10%), and WACC (8%) to determine their respective RI and EVA metrics. The following information reflects the components that Donna could identify for each of the three divisions in the company. Industrial Technology Service Sales $125,000 $344,000 $150,000 Operating Income $9,000 $17,200 $20,400 After-tax Operating Income $6,660 $12,728 $15,096 Operating Assets $80,000 $172,000 $100,000 Total Assets $100,000 $209,000 $100,000 Current Liabilities $5,000 $50,500 $10,000 ROI 11.25% 10% 20.40% RI $1,000 $0 $10,400 EVA $(940) $48 $7,896 Profit Margin 7.20% 5% 13.6% Asset Turnover 1.56 2.00 1.50 (b) Calculate the company's overall ROI, RI and EVA for last year according to your now-completed information; there are no intracompany transactions in these amounts. ROI Residual Income EVA
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