The Hotel Division of Treasure Island Corporation Had the Following

Essay

The Hotel Division of Treasure Island Corporation had the following results last year.
$$\begin{array} { | l | c | } \hline \text { Sales } & \$ 15,000,000 \\\hline \text { Operating incore } & \$ 6,000,000 \\\hline \text { Total assets } & \$ 10,000,000 \\\hline \text { Current liabilities } & \$ 3,000,000 \\\hline\end{array}$$ Management's target rate of return is 14% and the weighted average cost of capital is 10%.Its effective tax rate is 35%.
Required:
a.Calculate the return on investment (ROI).
b.Calculate the residual income.
c.Calculate the Economic Value Added (EVA).