Question
Coldbrook Company has two sources of funds: longminusterm debt with a market and book value of $ 18 comma 000 comma 000$18,000,000 issued at an
Coldbrook Company has two sources of funds:
longminusterm
debt with a market and book value of
$ 18 comma 000 comma 000$18,000,000
issued at an interest rate of
1010%,
and equity capital that has a market value of
$ 3 comma 000 comma 000$3,000,000
(book value of
$ 6 comma 500 comma 000$6,500,000).
Coldbrook Company has profit centers in the following locations with the following operating incomes, total assets, and current liabilities. The cost of equity capital is
1515%,
while the tax rate is
3030%.
Operating Income | Assets | Current Liabilities | |
Bish Bash Falls | $815,000 | $3,750,000 | $800,000 |
Brooksville | $ 1 comma 200 comma 000$1,200,000 | $ 5 comma 200 comma 000$5,200,000 | $ 1 comma 400 comma 000$1,400,000 |
Stonybrook | $2,450,000 | $9,250,000 | $3,180,000 |
What is the
EVA
for Brooksville? (Round intermediary calculations to four decimal places.)
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