Question: oak ridge waste management has a subsidiary that disposes of...
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|
|Noninterest-bearing current liabilities||3,272,200||13,028,200|
|Required Rate of return||10%||13%|
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
Based on the limited information, which subsidiary is the best
candidate for expansion?