uesion, 24 Stillwater Services (12/12, amended) 49 mins ny providing 05 fo the 1d. The company was ‘when the was bi to regional uty companies (ongiofwhihywas $5) and sold into p _ dostty regulatory ‘gm coca Company background Sillwater Services ($5) iso li ‘and busi of a region of in regulerddlserviees and the opera The KG pres ROGE set by the regula. regulator could empany. In he Bs, cher suehveompaniay hove seen fines omcurting 0 Economic value added (EVA™) The board of SS is trying to drive the performance for the bERBfi ofthe shareholders. This is o new cexperiencerfor m , having been in the until four years ago. In order to ty to better communica Ih, the hoard has decided to introdue economic value adde« we company, based on the following The Fi clor hos asked you to calculate for 4 fi n for the illwater Services Regucted — Nonregulated os $m $m tee 276.0 69.0 345.0 peers 230.0 470 277.0 Operatingyprefit 46.0 22.0 68.0 Prone bss) ioe 40/0) 95% oe Profit fer tox 355 Ceptal employe! 20K2 20x1 $m Meosed rom pu RB@Eons io io Meosured by guar ot eguletdetvissonl 7790 761.0 Notes ® 3sTotal operating costs include: Depreciation “ Provision for doubt sebis Sheree i é EconcimeldeprecisiGls assessed to be $83H in Economic depreiin includes ony appropriaty amorixationadusimentsns In rs, it camberessumeS ther efonomic and cccougingadepraation were the “ is the ec in the current year A} and an adjus r deferred tax "he >And» ‘ing *~ least ResecrEhiandidevelopmentisne! gopitelisedin the account tt that and is expected to be of ye company, 1 is project. Ee 16% Ke Core) % kg Gearing of SS 40% equity E 60% debt— quired Exaluae he performancerof $5 using EVA" (13 marks) = NOPAT- (WACC x CE b/f) a6 BPP