Kitto Electronics Data Kitto Electronics Expects an EBIT of $200,000 for Year-1.EBIT Is

Multiple Choice

Kitto Electronics Data
Kitto Electronics expects an EBIT of $200,000 for Year-1.EBIT is expected to grow at 6% thereafter.The tax rate is 25%.In order to support growth, Kitto must reinvest 20% of its EBIT in net operating assets.Kitto has $300,000 in 8% debt outstanding, and a similar company with no debt has a cost of equity of 11%.
-Refer to data for Kitto Electronics.According to the compressed adjusted present value model, what is Kitto's unlevered value?

A) $1,782,000
B) $1,980,000
C) $2,200,000
D) $2,420,000
E) $2,662,000