Answer the Following Questions Using the Information Below:
Echidna Company

question 92

Multiple Choice

Answer the following questions using the information below:
Echidna Company has two sources of funds: long-term debt with a market and book value of $30 million issued at an interest rate of 10%,and equity capital that has a market value of $18 million (book value of $5 million) .Echidna Company has profit centres in the following locations with the following operating profits,total assets,and current liabilities.The cost of equity capital is 15%,while the tax rate is 30%.
$$\begin{array} { | l | r | r | r | } \hline & \text { Operating Profit } & { \text { Assets } } & \text { Current Liabilities } \\\hline \text { Mt Iron } & \$ 1630000 & \$ 5625000 & \$ 1600000 \\\hline \text { Mt Pilbara } & \$ 2200000 & \$ 7500000 & \$ 2400000 \\\hline \text { Broken Hill } & \$ 4900000 & \$ 13875000 & \$ 6360000 \\\hline\end{array}$$
-What is the EVA for Mt Iron?

• A)$710 000
• B)$511 000
• C)$738 500
• D)$677 126

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Definitions:

Attribution Theory

A framework used in social psychology to understand how individuals infer the causes of others' behavior, as well as their own, as being due to personal dispositions or external situations.

Hostile Sexism

A form of sexism characterized by antagonistic attitudes and negative stereotypes about women.

Benevolent Sexism

A form of sexism that is expressed in a positive tone, often accompanied by paternalistic beliefs about women needing protection or nurturing.

Racist Sexism

The complex interplay between racism and sexism, where discrimination is based not only on gender but also on race or ethnicity, highlighting a dual axis of oppression.