Question 6 -

The firm has two divisions, divisions A and B, each with the same level of risk. The firms after-tax cost of capital is 16%. The firms EVA was $900,000 last year. The B division had an EVA of $300,000, while the A division had $3,750,000 of capital employed. The tax rate is 30%. What was the A divisions EBIT last year?

Hint book answer $1,714,286