Answer the Following Questions Using the Information Below:
Waldorf Company

question 22

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 Townsville?

• A)$135 580
• B)$234 000
• C)$220 000
• D)$305 000

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Definitions:

Jigsaw Classroom

An educational approach designed to minimize competitiveness and encourage cooperation by assigning each student in a small group a unique part of a larger academic task.

Stereotypes

Oversimplified and generalized beliefs about a particular group of people or type of person, often leading to prejudiced attitudes and behaviors.

Homophobia

Prejudice, fear, or hatred towards homosexuals or homosexuality, often resulting in discrimination.

Stereotypes

Widely held but oversimplified and generalized views or beliefs about a particular group of people or things.