Exhibit 9-6
USE THE FOLLOWING INFORMATION TO ANSWER THE NEXT

Exhibit 9-6
USE THE FOLLOWING INFORMATION TO ANSWER THE NEXT QUESTION(S)
You are provided with the following information on Kayray Corporation. Your ultimate objective is to calculate the EVA for the firm. $\begin{array}{llcc} \text {LIFO reserve } & 60 \\ \text { Net plant, property, and equipment } & 1325 \\ \text { Other assets } &30 \\ \text {Goodwill } &325 \\ \text { Accumulated Goodwill amortized } & 65\\ \text { PV of Operating leases } & 140 \\ \text { Tax benefit from interest on expenses } & 10\\ \text {Tax benefit from interest on leases } &5 \\ \text { Taxes on non-operating income } &2 \\ \text {Implied interest on op. lease } & 9.5 \\ \text { Increase in LIFO reserve } & 12 \\ \text { Goodwill amortization } & 15 \\ \text { Operating profit } & 550\\ \text { Income tax expense } & 215 \\ \text { Net working capital } & 440 \\ \text { WACC } & 0.12\\\end{array}$

-Refer to Exhibit 9-6. Calculate the dollar cost of capital.

A) 286.2
B) 207
C) 234.36
D) 238.44
E) 302.9