Compute the June 20xx Cost of Capital (Rounded to Nearest

Multiple Choice

Compute the June 20xx cost of capital (rounded to nearest percent) for an investment center with the following information: $\begin{array}{|lr|}\hline \text { Pre-tax operating income for June 20xx } & \$ 17,500,000 \\\text { Assets at June 30, 20xx } & 6,200,000 \\\text { Current liabilities at June 30,20xx } & 4,000,000 \\\text { Long-term liabilities at June 30,20xx } & 1,500,000 \\\text { Income tax expense for June 30,20xx } & 5,000,000 \\\text { EVA } & 12,040,000 \\\hline\end{array}$

A) 8 percent
B) 21 percent
C) 10 percent
D) 14 percent