The Division Director for Natchez Corporation's Mississippi Division, Which Operates

Multiple Choice

The division director for Natchez Corporation's Mississippi division, which operates as an investment center, is considering investing in machinery which costs of $2,200,000 and is expected to generate $332,000 in additional operating income.If the division's weighted average cost of capital is 11% and its tax rate is 20%, what is the equipment's EVA?

A) $23,600
B) $90,000
C) $242,000
D) $332,000