Coldbrook Company Has Two Sources of Funds: Long-Term Debt with a Market

question 20

Multiple Choice

Coldbrook Company has two sources of funds: long-term debt with a market and book value of $17,000,000 issued at an interest rate of 11%,and equity capital that has a market value of $3,000,000 (book value of $4,000,000) .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 35%.

What is the EVA^® for Bish Bash Falls? (Round intermediary calculations to four decimal places. )

• A)$530,400
• B)$264,061
• C)$266,339
• D)$159,638

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