The following are the details from the income statements of division S and division C for the year ending March 2014. Figures in TZS "000" Sales revenue 100,000 120,000 Operating cost Interest cost 64,000 6,000 75,000 10,000 Capital invested 122,000 150,000 Capital invested include debt WACC 10% 12.5% Rate of corporate tax 40% 44% Required: Calculate NOPAT as adjusted for EVA and also calculate EVA for both the divisions. Which Division performed better?

SWFT Comprehensive Vol 2020
43rd Edition
ISBN:9780357391723
Author:Maloney
Publisher:Maloney
Chapter22: S Corporations
Section: Chapter Questions
Problem 16CE
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The following are the details from the income statements of division S and division C for the year ending
March 2014. Figures in TZS "000"
Sales revenue
100,000
64,000
6,000
120,000
75,000
10,000
150,000
Operating cost
Interest cost
Capital invested
122,000
Capital invested include debt
WACC
10%
12.5%
Rate of corporate tax
40%
44%
Required: Calculate NOPAT as adjusted for EVA and also calculate EVA for both the divisions. Which Division
performed better?
Transcribed Image Text:The following are the details from the income statements of division S and division C for the year ending March 2014. Figures in TZS "000" Sales revenue 100,000 64,000 6,000 120,000 75,000 10,000 150,000 Operating cost Interest cost Capital invested 122,000 Capital invested include debt WACC 10% 12.5% Rate of corporate tax 40% 44% Required: Calculate NOPAT as adjusted for EVA and also calculate EVA for both the divisions. Which Division performed better?
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