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Scarbrough Company has two sources of funds: long-term debt with a market and book value of $15 million issued at an interest rate of 10%,

Scarbrough Company has two sources of funds: long-term debt with a market and book value of $15 million issued at an interest rate of 10%, and equity capital that has a market value of $9 million (book value of $5 million). Scarbrough Company has profit centres in the following locations with the following operating incomes, total assets, and current liabilities. The cost of equity capital is 15%, and the tax rate is 30%.

What is the EVA for Bish Bash Falls? Answer 27,500 - Please show solution to achieve this amount.

Operating Income Assets Current Liabilities
Bish Bash Falls $815,000 $3,750,000 $800,000
Brooksville $1,100,000 $5,000,000 $1,200,000
Stonybrook $2,450,000 $9,250,000 $3,180,000

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