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

question 122

Multiple Choice

Coldbrook Company has two sources of funds: long-term debt with a market and book value of $19,000,000 issued at an interest rate of 11%, and equity capital that has a market value of $7,000,000 (book value of $5,000,000) . Coldbrook Company has profit centers in the following locations with the following operating incomes, total assets, and current liabilities. The cost of equity capital is 16%, while the tax rate is 35%.

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

• A) $715,000
• B) $390,730
• C) $166,179
• D) $324,270

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Definitions:

Niche Market

A specific, defined segment of the market that is targeted by a business, characterized by its unique needs, preferences, or identity.

Social Network

A digital platform that connects individuals, allowing them to share information, interests, and form virtual communities.

Standards Of Behavior

Standards of behavior refer to established norms and rules governing the conduct of individuals within a society, organization, or community.

Virtual Communities

Groups of individuals who interact and share common interests or goals through the internet, without the need for physical presence.