Springfield Corporation,whose Tax Rate Is 30%,has Two Sources of Funds

Multiple Choice

Springfield Corporation,whose tax rate is 30%,has two sources of funds: long-term debt with a market value of $8,400,000 and an interest rate of 8%,and equity capital with a market value of $14,000,000 and a cost of equity of 13%.Springfield has two operating divisions,the Blue division and the Gold division,with the following financial measures for the current year:

What is Economic Value Added (EVA^®) for the Blue Division? (Round intermediary calculations to four decimal places. )

A) -$86,580
B) $86,580
C) $404,280
D) -$230,550