Here are simplified financial statements for Watervan Corporation:
INCOME STATEMENT  
(Figures in $ millions)  
Net sales  $ 
888.00 
Cost of goods sold 
748.00 

Depreciation 
38.00 

Earnings before interest and taxes (EBIT)  $ 
102.00 
Interest expense 
19.00 

Income before tax  $ 
83.00 
Taxes 
17.43 

Net income  $ 
65.57 
BALANCE SHEET  
(Figures in $ millions)  
End of Year  Start of Year  
Assets  
Current assets  $ 
376 
$ 
326 

Longterm assets 
272 
229 

Total assets  $ 
648 
$ 
555 

Liabilities and shareholders’ equity  
Current liabilities  $ 
201 
$ 
164 

Longterm debt 
115 
128 

Shareholders’ equity 
332 
263 

Total liabilities and shareholders’ equity  $ 
648 
$ 
555 

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 startofyear 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 startofyear rather than average equity.) (Enter your answer as a percent rounded to 2 decimal places.)
d. Is the company creating value for its shareholders?
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