Madison Corporation purchases an investment in Lake Geneva, Inc. at a purchase price of $8 million cash, representing 40% of the book value of Lake Geneva, Inc. During the year, Lake Geneva reports net income of $1,360,000 and pays $335,200 of cash dividends. At the end of the year, the market value of Madisons investment is $10 million. What is the year-end balance of the equity investment in Lake Geneva?

Select one:

a. $8,544,000

b. $10,000,000

c. $9,024,800

d. $8,409,920

e. $8,000,000