Answer the Following Questions Using the Information Below:
Waldorf Company

question 24

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 $10 million issued at an interest rate of 12%,and equity capital that has a market value of $8 million (book value of $4 million) .Waldorf Company has profit centres in the following locations with the following operating profits,total assets,and current liabilities.The cost of equity capital is 12%,while the tax rate is 25%.
$$\begin{array} { | l | r | r | r | } \hline & \text { Operating Profit } & { \text { Assets } } & \text { Current Liabilities } \\\hline \text { Mildura } & \$ 960000 & \$ 4000000 & \$ 200000 \\\hline \text { Townsville } & \$ 1200000 & \$ 8000000 & \$ 600000 \\\hline \text { Broome } & \$ 2040000 & \$ 12000000 & \$ 1200000 \\\hline\end{array}$$
-What is the EVA for Mildura?

• A)$720 000
• B)$327 460
• C)$392 540
• D)$255 740

---

Definitions:

Political Borders

Imaginary lines that define the boundary of a nation or state, separating it from other nations or states.

Exploitation

The action or fact of treating someone unfairly in order to benefit from their work or resources.

Privilege

Unearned advantage accorded to members of dominant social groups (males, whites, heterosexuals, the physically able, etc.).

Unearned

Income or benefits received without a direct exchange of goods or services, such as inheritance, gifts, or subsidies.