TI23-2 (similar to) Sky City supplies helicopters to corporate clients. (Click the icon to view additional information.) Requirement a. What is Sky City's weighted average cost of capital? Begin by determining the formula to calculate WACC. The company's results for 2017 are as follows: (Click the icon to view the data.) Read the requirements. After tax cost of debt x Market value of debt ) + ( Market value of debt Cost of equity Market value of equity) = WACC Market value of equity (Enter the amount as a decimal. Round the WACC to five decimal places, in the format X.XXXXX.) The company's WACC is 0.10404 Requirement b. Compute each division's Economic Value Added. Determine the formula to calculate the EVA of each city. Then enter the amounts for New York and Chicago and calculate the EVA for each. (Enter the WACC to five decimal places in the format X.XXXXX. Round your intermediary calculations to the nearest whole number. Use parentheses or a minus sign when entering a negative EVA. Abbreviation used: inc. = income.) After tax operating inc. - ( WACC x( Total assets Current liabilities )) = EVA New York: 1,400,000-( 0.10404 x ( 12,500,000 - 2,800,000 )) = $ 390,812 Chicago: 1,715,000-( 0.10404 x ( 13,000,000 - $ 3,300,000 )) = $ 705,812 M i Data Table - iMore Info Operating Income Assets Current Liabilities New York $ 2,000,000 $12,500,000 $ Chicago 2,450,000 13,000,000 2,800,000 3,300,000 Print Done - Sky City has two sources of funds: long-term debt with a market and book value of $27 million issued at an interest rate of 10% and equity capital that has a market value of $20 million (book value of $13 million). The cost of equity capital for Sky City is 15%, and its tax rate is 30%. Sky City has divisions in two cities that operate autonomously. Print Done