Waldorf Company has two sources of funds: long-term debt with a market and book value of $5,200,000 issued at an interest rate of 13%,and equity capital that has a market value of $4,200,000 (book value of $2,400,000) .Waldorf Company has profit centers in the following locations with the following operating incomes,total assets,and current liabilities.The cost of equity capital is 13%,while the tax rate is 25%.

What is the EVA^® for Cedar Rapids? (Round intermediary calculations to four decimal places. )

Question

Waldorf Company has two sources of funds: long-term debt with a market and book value of $5,200,000 issued at an interest rate of 13%,and equity capital that has a market value of $4,200,000 (book value of $2,400,000) .Waldorf Company has profit centers in the following locations with the following operating incomes,total assets,and current liabilities.The cost of equity capital is 13%,while the tax rate is 25%.

What is the EVA^® for Cedar Rapids? (Round intermediary calculations to four decimal places. )

Quizplus · Accepted Answer

Cedar Rapids ()= ($620,000 × (1 - 0.25))- [0.1120 × ($2,000,000 - $310,000)]
 11ea8a5a_9f95_b6de_a19c_3327c5ab9a7f_TB5540_00_TB5540_00_TB5540_00 = $275,720

Waldorf Company Has Two Sources of Funds: Long-Term Debt with a Market