Thomas Company Compiled the Following Information from Its Financial Records

Multiple Choice

Thomas Company compiled the following information from its financial records for the year ending December 31, 2014:
$\begin{array}{ll}\text {Research and development costs incurred during 2014 }& \$1,200,000\\\text {Total assets }&5,200,000 \\\text { Current liabilities, interest bearing}&300,000 \\\text {Current liabilities, noninterest-bearing }& 800,000\\\text {Net income }&950,000 \\\text { Sales}&11,300,000 \\\text {Interest expense }&670,000 \\\text {Cost of capital }& 10\%\\\text {income tax rate }& 30\%\\\end{array}$

Thomas' amortization policy is 4 years. How much is the accounting distortion adjustment to invested capital when calculating EVA?

A) $900,000
B) $300,000
C) $840,000
D) $630,000
Material from the appendix to the chapter is marked with an asterisk (*) .