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Calculate ROI, Residual Income, and EVA for Each of the Investment

Question 113

Essay

Calculate ROI, residual income, and EVA for each of the investment centers listed. (Round to two decimal places.)
 Investment Center 1  Investment Center 2  Pretax Operating income $50,000$70,000 Assets invested 125,000180,000 Income taxes 15,00021,000 Cost of capital in dollars 13,00025,000 Desired ROI 56%48%\begin{array}{lrr} & \text { Investment Center 1 } & \text { Investment Center 2 } \\\text { Pretax Operating income } & \$ 50,000 & \$ 70,000 \\\text { Assets invested } & 125,000 & 180,000 \\\text { Income taxes } & 15,000 & 21,000 \\\text { Cost of capital in dollars } & 13,000 & 25,000 \\\text { Desired ROI } & 56 \% & 48 \%\end{array}

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