Diablo Corporation's Western Region Operates as an Investment Center

Multiple Choice

Diablo Corporation's Western region operates as an investment center.John Mosby,the division's director,is considering investing in manufacturing equipment with a cost of $120,000.The equipment is expected to generate $35,000 in additional operating income.If the weighted average cost of capital is 18%,what is the equipment's EVA?

A) $35,000
B) $21,600
C) $13,400
D) None of these ans choices are correct