Answer the Following Questions Using the Information Below:
Coldbrook Company

question 38

Multiple Choice

Answer the following questions using the information below:
Coldbrook Company has two sources of funds: long-term debt with a market and book value of $15 million issued at an interest rate of 10%, and equity capital that has a market value of $9 million (book value of $5 million) . Coldbrook Company has profit centers in the following locations with the following operating incomes, total assets, and current liabilities. The cost of equity capital is 15%, while the tax rate is 30%.
$$\begin{array} { | l | r | r | r | } \hline & \text { Operating Income } & \text { Assets } & \text { Current Liabilities } \\\hline \text { Bish Bash Falls } & \$ 815,000 & \$ 3,750,000 & \$ 800,000 \\\hline \text { Brooksville } & \$ 1,100,000 & \$ 5,000,000 & \$ 1,200,000 \\\hline \text { Stonybrook } & \$ 2,450,000 & \$ 9,250,000 & \$ 3,180,000 \\\hline\end{array}$$
-What is the EVA for Brooksville?

• A) $476,250
• B) $428,000
• C) $415,525
• D) $390,000

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Definitions:

Job Variety

The degree to which a job involves different tasks, skills, and activities, often contributing to worker satisfaction and motivation.

Mass Production

Refers to the manufacturing of large quantities of standardized products, often using assembly lines or automated technology.

Mental Attention

The cognitive process of focusing consciousness or awareness on specific stimuli, tasks, or thoughts.

Self-paced

A learning or work method that allows individuals to control the speed at which they progress through content or tasks.