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

question 80

Essay

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

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Definitions:

Vessel Wall

The structure surrounding blood vessels consisting of layers that include the endothelium, smooth muscle, and connective tissue, providing stability and controlling vessel diameter.

Critical Closing Pressure

Pressure in a blood vessel below which the vessel collapses, occluding the lumen and preventing blood flow.

Vessel Collapses

The condition where blood or lymphatic vessels lose their structural integrity, leading to closure or impairment of blood flow.

Hypertension

A condition characterized by elevated blood pressure levels that can lead to significant health risks if left untreated.