Kernel Industries has two sources of funds: long-term debt with a market and book value of $5 million issued at an interest rate of 12%, and equity capital that has a market value of $4 million (book value of $2 million). Kernel Industries has profit centers in the following locations with the following operating incomes, total assets, and current liabilities. The cost of equity capital is 12%, while the tax rate is 25%.

operating income Assets Current liability

St. Augustine $480,000 $2,000000 $100,000

Austin $600,000 $4,000000 $300,000

New Orleans $1,020,000 $6,000000 $600,000

What is the After Tax Operating Income for New Orleans?

A.$360,000

B.$450,000

C.$600,000

D.$765,000