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   Operating Income For Segments

   Xenold, Inc., manufactures and sells cooktops and ovens through three divisions: Home, Restaurant, and Specialty. Each division is evaluated as a profit center. Data for each division for last year are as follows (numbers in thousands):

   	Home	Restaurant	Specialty
   Sales	$4,130	$3,600	$2,550
   Cost of goods sold	2,900	2,640	1,700
   Selling and administrative expenses	950	410	320

   The income tax rate for Xenold, Inc., is 40 percent. Xenold, Inc., has two sources of financing: bonds paying 5 percent interest, which account for 25 percent of total investment, and equity accounting for the remaining 75 percent of total investment. Xenold, Inc., has been in business for over 15 years and is considered a relatively stable stock, despite its link to the cyclical construction industry. As a result, Xenold stock has an opportunity cost of 5 percent over the 4 percent long-term government bond rate. Xenold's total capital employed is $5.04 million ($2,600,000 for the Home Division, $1,700,000 for the Restaurant Division, and the remainder for the Specialty Division).

   Required:

   1. Prepare a segmented income statement for Xenold, Inc., for last year. Enter the amounts in thousands.

   Xenold, Inc. Income Statement (in thousands) For the Year 20XX

   	Home	Restaurant	Specialty	Total
   Sales	$fill in the blank 1a1097fad04b024_1	$fill in the blank 1a1097fad04b024_2	$fill in the blank 1a1097fad04b024_3	$fill in the blank 1a1097fad04b024_4
   Cost of goods sold	fill in the blank 1a1097fad04b024_5	fill in the blank 1a1097fad04b024_6	fill in the blank 1a1097fad04b024_7	fill in the blank 1a1097fad04b024_8
   Gross profit	$fill in the blank 1a1097fad04b024_9	$fill in the blank 1a1097fad04b024_10	$fill in the blank 1a1097fad04b024_11	$fill in the blank 1a1097fad04b024_12
   Selling and administrative expense	fill in the blank 1a1097fad04b024_13	fill in the blank 1a1097fad04b024_14	fill in the blank 1a1097fad04b024_15	fill in the blank 1a1097fad04b024_16
   Division profit	$fill in the blank 1a1097fad04b024_17	$fill in the blank 1a1097fad04b024_18	$fill in the blank 1a1097fad04b024_19	$fill in the blank 1a1097fad04b024_20
   Income taxes	fill in the blank 1a1097fad04b024_21	fill in the blank 1a1097fad04b024_22	fill in the blank 1a1097fad04b024_23	fill in the blank 1a1097fad04b024_24
   After-tax income	$fill in the blank 1a1097fad04b024_25	$fill in the blank 1a1097fad04b024_26	$fill in the blank 1a1097fad04b024_27	$fill in the blank 1a1097fad04b024_28

   2. Calculate Xenold's weighted average cost of capital. Enter your answer as a decimal value rounded to three places. For example, 4.36% would be entered as ".044". Round your calculations to four decimal places. fill in the blank 0cb717f6601afa4_1

   3. Calculate EVA for each division and for Xenold, Inc. In your computations, carry the weighted average cost of capital to three decimal places. If the EVA is negative, enter your answer as a negative amount. Enter amounts as whole dollars not in thousands.

   	EVA
   Home	$ fill in the blank 0cb717f6601afa4_2
   Restaurant	$ fill in the blank 0cb717f6601afa4_3
   Specialty	$ fill in the blank 0cb717f6601afa4_4
   Total	$ fill in the blank 0cb717f6601afa4_5

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