Managerial Accounting: E12-11 Lakeside Hospital is a division of Superior Healthcare

Managerial Accounting
Exercise 12-11. Evaluating Investment Center with Residual Income
Lakeside Hospital is a division of Superior Healthcare organized as an investment center. In the past year, the hospital reported an after-tax income of $2,500,000. Total interest expense was $1,900,000, and the hospital's tax rate was 35 percent. Hospital assets totaled $33,000,000, and noninterest-bearing current liabilities were $10,400,000. Superior has established a required rate of return equal to 17 percent of invested capital.
Required
Calculate the residual income/EVA of Lakeside Hospital.
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