Coldbrook Company Has Two Sources of Funds: Long-Term Debt with a Market

Multiple Choice

Coldbrook Company has two sources of funds: long-term debt with a market and book value of $19,000,000 issued at an interest rate of 11%, and equity capital that has a market value of $7,000,000 (book value of $5,000,000) . Coldbrook Company has profit centers in the following locations with the following operating incomes, total assets, and current liabilities. The cost of equity capital is 16%, while the tax rate is 35%.

What is the EVA® for Brooksville? (Round intermediary calculations to four decimal places.)

A) $715,000
B) $390,730
C) $166,179
D) $324,270