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

question 9

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) $163,200
• D) $200,000
• E) $145,000

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Definitions:

Release

A promise not to sue or press a claim, or a discharge of a person from any further responsibility to act.

Neurological Disease

A condition affecting the nervous system, including the brain, spinal cord, and nerves.

Specific Performance

A legal remedy that requires a party to perform a specific act, often the fulfillment of a contract, rather than simply paying damages for failing to fulfill it.

Condition Precedent

A condition in a contract that must be met before a party's obligation becomes due.