ELN Waste Management has a subsidiary that disposes of hazardous waste and a subsidiary that collects and disposes of residential garbage. Information related to the two subsidiaries follows:

Problem 12-7 ELN Waste Management has a subsidiary that disposes of hazardous waste and a subsidiary that collects and disposes of residential garbage. Information related to the two subsidiaries follows: Hazardous Residential Waste Waste Total assets $15,230,000 $86,690,000 Noninterest-bearing current liabilities 3,250,000 13,060,000 Net income 1,960,000 6,650,000 Interest expense 1,469,000 8,000,000 10% Required rate of return 13% 40% 40% Tax rate