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Question: oak ridge waste management has a subsidiary that disposes of...

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Oak Ridge Waste Management has a subsidiary that disposes of hazardous waste and a subsidiary that collects and disposes of residential garbage. Information related to the two subsidiaries follows:

Hazardous Waste Residential Waste
Total Assets $15,232,900 $86,750,000
Noninterest-bearing current liabilities 3,272,200 13,028,200
Net income 1,889,900 6,642,300
Interest expense 1,450,100 7,990,100
Required Rate of return 10% 13%
Tax rate 40% 40%

Calculate ROI for both subsidiaries. (Round answers to 2 decimal places, e.g. 15.32%.)

Calculate EVA for both subsidiaries. Note that since no adjustments for accounting distortions are being made, EVA is equivalent to residual income. (Enter negative answers preceding either - sign, e.g. -45 or in parentheses, e.g. (45).)

Which subsidiary has added the most to shareholder value in the last year?

Based on the limited information, which subsidiary is the best candidate for expansion?

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