(ROI, EVA) Speed Boats Inc. has two divisions, Economy and Elite. The tax rate for the company is 40%. The following information pertains to the 2011 year:
|
Economy |
Elite |
|
|
Revenues |
$3,800,000 |
$2,500,000 |
|
Current liabilities |
250,000 |
300,000 |
|
Total assets |
1,800,000 |
1,100,000 |
|
Before-tax operating income |
350,000 |
160,000 |
|
WACC |
11.5% |
11.5% |
- What is the ROI for each division?
- What is the EVA for each division?
- What other ratio could be used to evaluate each division?