Answer the Following Questions Using the Information Below:
Coldbrook Company

question 67

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 Bish Bash Falls?

• A) $338,563
• B) $305,000
• C) $275,500
• D) $255,500

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Definitions:

Developmental Period

A specific phase in an individual's life marked by unique physical, psychological, or emotional growth and change.

Sexual Maturity

The stage in which an individual reaches full reproductive ability and exhibits secondary sexual characteristics.

Adolescence

A developmental stage that occurs between childhood and adulthood, marked by significant physical, psychological, and social changes.

Secondary Sex Characteristics

Physiological signs of sexual maturation (such as breast development and growth of body hair) that do not involve the sex organs.