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The foilowing information applies to the questions displayed below) Cape Cod Lobster Shacks, Inc. (CCLS) is a seafood restaurant chain operating throughout the northeast. The
The foilowing information applies to the questions displayed below) Cape Cod Lobster Shacks, Inc. (CCLS) is a seafood restaurant chain operating throughout the northeast. The company has two sources of long-term capital debt and equity. The cost to CCLS of issuing debt is the after-tax cost of the interest payments on the debt, taking into accsunt the fact that the interest peyments are tax deductible. The cost of CCLS's equity capital is the investment opportunity rate of CCLS's investors, that is, the rate they could earn on investments of similar risk to thet of investing in Cape Cod Lobster Shacks, Inc. The interest rate on CCLS's $80 million of long-term debt is 9 percent, and the company's tax rate is 40 percent. The cost of CCLSs equity capital is 14 percent. Moreover, the market value (and book value) of CCLS's equity is S120 milion Cape Cod Lobster Shacks, Inc. consists of two divisions, the properties division and the food service division. The divisions total assets, current labilities, and before-tax operating income for the most recent year are as follows Before-Tax Current Operating Income $145.000.000 $3.000,000 $29,000,000 6.000000 15.000,000 Total Assets Liabilities Division Food Service 64 Award: 10.00 points 2 Calculate the economic value added (EVA) for each of CCLS's divisions. (Do not round intermediate calculations. Enter your answers in millions rounded to 4 decimal places (i.e., 1,234,000 should be entered as 1.2340.) Economic Value Added Division in millions) Food Service
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