Use the Information Below to Answer the Following Question(s)

question 90

Multiple Choice

Use the information below to answer the following question(s) .Brandorf Company has two sources of funds: long term debt with a market and book value of $9 million issued at an interest rate of 10 percent; and, equity capital that has a market value of $6 million (book value of $2 million) .The cost of equity capital is 5 percent, while the tax rate is 30 percent.Brandorf Company has profit centres in the following locations with the following data:

-What is EVA for St.Johns?

• A)$142,200
• B)$190,600
• C)$310,600
• D)$200,000
• E)$145,000