Two companies with different economic-value-added (EVA) profiles are Houle Oil Pipeline, Inc., and Johnson Bank Limited. Adapted versions of the two companies€™ financial statements are presented here (in millions):

Requirements
1. Before performing any calculations, which company do you think represents the better investment? Give your reason.
2. Compute the EVA for each company and then decide which company€™s stock you would rather hold as an investment. Assume both companies cost of capital is 11.0%. (Round your EVA calculation to the nearest wholenumber.)

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Houle Oil Johnson Bank Limited Pipeline, Inc. Balance sheet data: S 4,338 S 1,250 2,900 188 S 4,338 $14,451 Total assets Interest-bearing debt All other liabilities Stockholders'equity. Total liabilities and equity..33 2,585 11,861 $14,451 Income statement data: $3,697 Total revenue Interest expense Net i $10,991 80 S 200 $ 1,197