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Roterblade Company supplies helicopters to corporate clients. Roterblade has two sources of funds: long term debt with a market and book value of 532 million
Roterblade Company supplies helicopters to corporate clients. Roterblade has two sources of funds: long term debt with a market and book value of 532 million issued at an interest rate of 10%, and equity capital that has a market value of $18 million (book value of $8 million). The cost of equity capital for Roterblade is 15%, and its tax rate is 30%. Roterblade has profit centers in four divisions that operate autonomously. The company's results for 2020 are as follows: New York Chicago Dallas Los Angeles Operating Income Assets $1,750,000 $11,500,000 2,400,000 9,000,000 4.675.000 27,500,000 4,200,000 25,000,000 Current Liabilities $2,500,000 3,500,000 9,500,000 8,000,000 Compute the Los Angeles division's Economic Value Added $1,494,100 $335,800 $1,136,600 $1,260,400
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