Here are simplified financial statements for Watervan Corporation:
INCOME STATEMENT  
(Figures in $ millions)  
Net sales  $ 
885.00 
Cost of goods sold 
745.00 

Depreciation 
35.00 

Earnings before interest and taxes (EBIT)  $ 
105.00 
Interest expense 
16.00 

Income before tax  $ 
89.00 
Taxes 
31.15 

Net income  $ 
57.85 
BALANCE SHEET  
(Figures in $ millions)  
End of Year  Start of Year  
Assets  
Current assets  $ 
373 
$ 
320 

Longterm assets 
266 
226 

Total assets  $ 
639 
$ 
546 

Liabilities and shareholders’ equity  
Current liabilities  $ 
198 
$ 
161 

Longterm debt 
112 
125 

Shareholders’ equity 
329 
260 

Total liabilities and shareholders’ equity  $ 
639 
$ 
546 

The company’s cost of capital is 8%.
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.)
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