Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. the table below shows a condensed income statement

The table below shows a condensed income statement and balance sheet for Androscoggin Coppers Rumford...

80.2K

Verified Solution

Question

Finance

The table below shows a condensed income statement and balance sheet for Androscoggin Coppers Rumford smelting plant (figures in $ millions). Assume the cost of capital is 9%.

Income Statement for 2018 Assets, December 31, 2018
Revenue $ 57.46 Net working capital $ 7.00
Raw materials cost 18.64
Operating cost 21.01 Investment in plant and equipment 70.13
Depreciation 4.42 Less accumulated depreciation 21.09
Pretax income $ 13.39 Net plant and equipment $ 49.04
Tax at 21% 2.81
Net income $ 10.58 Total assets $ 56.04

a. Calculate the plants EVA. (Enter your answer in millions rounded to 2 decimal places.)

b. As the table above shows, the plant is carried on Androscoggins books at $49.04 million. However, it is a modern design, and could be sold to another copper company for $103 million. How should this fact change your calculation of EVA? (Negative answers should be indicated by a minus sign. Enter your answer in millions rounded to 2 decimal places.)

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Basic Math
1.2K views

Mean number of desks produced per week is 42 and population standard deviation is 4.67. the...

Medical Sciences
1.2K views

What is the resting potential? What are the charges inside and outside of the neuron? Which...

Biology
1.2K views

What are the 6 general phases in the life cycle of animal virus and explain...

Biology
1.2K views

12 Osmotic pressure depends on Number of dissolved particles in per liter and does not...

Algebra
1.2K views

Use the matrices below to perform matrix multiplication A 8 1 4 6 6 AB...

Accounting
1.2K views

Break-Even Sales Under Present and Proposed ConditionsDarby Company, operating at full capacity, sold 125,900 units...

Accounting
1.2K views

As we go to press, the federal income tax rates for 2023 are being determined...

Accounting
1.2K views

How does one interpret a company's income statement, balance sheet, and financial ratios to determine...

Accounting
1.2K views

Exercise 1-11 (Algo) Cost Behavior; Contribution Format Income Statement [LO1-4, LO1-6] Harris Company manufactures and...

Accounting
1.2K views

The petty cash fund eliminates the need for a bank checking account. True False

Accounting
1.2K views

ABC purchase three pieces of equipment from XYZ for $400,000. Given the following information, calculate...

Accounting
1.2K views

Changes in the total asset turnover ratio may indicate changes in: a). Product profitability b)....