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Tomlinson Tech has a cost of capital of 8 percent, a required rate of return of 9.5%, and an income tax rate of 30 percent.
Tomlinson Tech has a cost of capital of 8 percent, a required rate of return of 9.5%, and an income tax rate of 30 percent. The Consumer Division of Tomlinson Tech has assets totaling $2,800,000 and current liabilities at $180,000 with $40,000 of this amount being interest-bearing. Sales for the year totaled $1,900,000 and interest expense totaled $20,000. Net income was $166,500 for the year. How much is the Consumer Division's invested capital?
A $2,940,000
B $2,620,000
C $2,560,000
D $2,660,000
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