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Coldbrook Company has two sources of funds: long-term debt with a market and book value of $18,000,000 issued at an interest rate of 10%, and
Coldbrook Company has two sources of funds: long-term debt with a market and book value of $18,000,000 issued at an interest rate of 10%, and equity capital that has a market value of $3,000,000 (book value of $4,000,000). 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 15%, while the tax rate is 35%. Bish Bash Falls Brooksville Stonybrook Operating Income $817,000 $1,100,000 $2,450,000 Assets: $4,500,000 $5,000,000 $9,250,000 Current Liabilities $810,000 $1,200,000 $3,180,000 What is the EVA for Bish Bash Falls? (Round intermediary calculations to four decimal places.) OA. $150,627 OB. $531,050 OC. $246,551 OO D. $284,499
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