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Detroit Corporation has a required rate of return of 15%. The weighted average cost of capital is 10%. Information for Detroit Corporation operations over the
Detroit Corporation has a required rate of return of 15%. The weighted average cost of capital is 10%. Information for Detroit Corporation operations over the past 2 years follows.
2015 | 2014 | |
Current assets | $120,000 | $100,000 |
Property, plant and equipment (cost) | 300,000 | 280,000 |
Accumulated depreciation | 80,000 | 60,000 |
Current liabilities | 90,000 | 70,000 |
Long-term debt | 85,000 | 80,000 |
Pretax operating income | 52,800 | 48,900 |
Income tax rate | 30% | 30% |
What was the Detroit Corporation EVA for 2015?
Group of answer choices
$3,960
$11,960
$20,460
$27,800
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