Answer the Following Questions Using the Information Below:
Waldorf Company

question 129

Multiple Choice

Answer the following questions using the information below:
Waldorf Company has two sources of funds: long-term debt with a market and book value of $5 million issued at an interest rate of 12%, and equity capital that has a market value of $4 million (book value of $2 million) . 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 12%, while the tax rate is 25%.
$$\begin{array} { | l | r | r | r | } \hline & \text { Operating Income } & \text { Assets } & \text { Current Liabilities } \\\hline \text { St. Louis } & \$ 480,000 & \$ 2,000,000 & \$ 100,000 \\\hline \text { Cedar Rapids } & \$ 600,000 & \$ 4,000,000 & \$ 300,000 \\\hline \text { Wichita } & \$ 1,020,000 & \$ 6,000,000 & \$ 600,000 \\\hline\end{array}$$
-What is the EVA for Cedar Rapids?

• A) $67,790
• B) $110,000
• C) $117,000
• D) $152,500

---

Definitions:

Infinity Symbol

A mathematical symbol representing the concept of infinity, typically depicted as a horizontal figure eight ( ∞ ).

One-To-Many Relationship

A type of relationship in databases where a single record in one table can be associated with multiple records in another table.

Expand Button

A user interface element that when clicked, reveals additional content or expands a section to show more information.

Record Selector Button

A control in a database form or datasheet used to select and highlight an entire row of data.