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: $\begin{array}{|l|c|}\hline \text { Pre-tax operating income for June } 20 \mathrm{xx} & \$ 17,500,000 \\\hline \text { Assets at June } 30,20 \mathrm{xx} & \$, 200,000 \\\hline \text { Current liabilities at June } 30,20 \mathrm{xx} & 4,000,000 \\\hline \text { Long-term liabilities at June } 30,20 \mathrm{kx} & 1,500,000 \\\hline \text { Income tax expense for June 30, 20:x } & 5,000,000 \\\hline \text { EVA } & 11,940,000 \\\hline\end{array}$

A) 10 percent
B) 25 percent
C) 13 percent
D) 17 percent