Question

Information for Garland Construction for last year:   Sales $2,000,000 Variable costs $1,200,000 Traceable fixed costs $200,000...

Information for Garland Construction for last year:  

Sales

$2,000,000

Variable costs

$1,200,000

Traceable fixed costs

$200,000

Average invested capital (assets)

$3,000,000

Current liabilities

$200,000

Required rate of return

15%

Marginal tax rate

36%

Weighted average cost of capital

12%

Solve

1. residual income.

2. return on investment.

3. Calculate the economic value added

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