Problem: A company that uses EVA reported the following results for 20X4 and 20X5 (in millions):
..............................................20X4............20X5
Pretax operating Income....... 5,698...........5,700
Cash Taxes........................... 1,676...........1,600
Average adjusted invested capital was $20,308 million in 20X4 and $18,091 million in 20X5, and the cost of capital was 9% in both 20X4 and 20X5.
1. Compute the Company's EVA for 20X4 and 20X5.
2. Compare the company's performance in creating value for its shareholders in 20X5 with that in 20X4.