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 net operating profit.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 answer choices are correct