Coptermagic Company supplies helicopters to corporate clients. Coptermagic has two sources of funds: long term debt with a market and book value of $32 million issued at an interest rate of 12%, and equity capital that has a market value of $18 million (book value of $8 million). The cost of equity capital for Coptermagic is 15%, and its tax rate is 30%. Coptermagic has profit centers in four divisions that operate autonomously. The company's results for 2019 are as follows:

	Operating		Current
	Income	Assets	Liabilities
New York	$1,750,000	$12,500,000	$2,500,000
Chicago	$2,400,000	$ 9,000,000	$3,500,000
Dallas	$4,675,000	$25,500,000	$9,500,000
Los Angeles	$4,200,000	$24,000,000	$8,000,000

The company is planning an expansion, which will require each division to increase its investments by $3,400,000 and its income by $500,000.

Required:

a. Compute Coptermagic's weighted average cost of capital.

b. Compute each divisions Economic Value Added.

c. Rank the divisions by EVA.

d. Determine the effects after adding the new expansion to each divisions EVA (show calculations).