Brandorf Company has two sources of funds: long term debt with a market and book value of $9 million issued at an interest rate of 10 percent; and, equity capital that has a market value of $6 million (book value of $2 million). The cost of equity capital is 5 percent, while the tax rate is 30 percent. Brandorf Company has profit centres in the following locations with the following data: Ottawa St. Johns Regina Before-tax Operating Income Total Assets Current Liabilities $480,000 $2,000,000 $100,000 $600,000 $4,000,000 $300,000 $1,020,000 $6,000,000 $600,000 What is EVA for St. Johns? $310,600 $200,000 $142,200 $190,600 $145,000 A corporation has a required rate of return of 13% for all subsidiaries. The Calgary subsidiary earned residual income of $200,000 in year 1, and $300,000 in year 2 on an investment base of $4,500,000. What rate of return did the Calgary subsidiary earn in years 1 and 2 respectively? 13.0% and 13.0% 10.00% and 13.00% 17.4% and 19.7% 4.4% and 6.7% 7.9% and 10.9% An automotive dealership, with a book value of $3,000,000, and total assets of $5,000,000, has a long history of earning 18%. Last year, the company earned $900,000. The owner is considering acquiring another dealership in a nearby town. If the expansion increases income by 50%, what is the maximum amount of investment the owner can make in the new dealership in order to maintain his desired 18% return? $2,500,000 $5,000,000 $1,350,000 $9,000,000 $3,000,000 Paymaster Company provided the following information for the year just ended. Revenue Operating assets Net operating income Total assets $200,000 70,000 110,000 104,500 What is the return on investment? 0.55 2.25 1.05 1.57 0.59 During the past year Badger Company had a net income of $175,000. What is the ROI if the investment is $25,000? 0.142 5.140 5.450 2.500 7.000