Answer the following question(s)using the information below:
Springfield Corporation, whose tax rate is 40%, has two sources of funds: long-term debt with a market value of $8,000,000 and an interest rate of 8%, and equity capital with a market value of $12,000,000 and a cost of equity of 12%.Springfield has two operating divisions, the Blue division and the Gold division, with the following financial measures for the current year:

-What is Economic Value Added ( )for the Gold Division?
A)-$283,200
B)-$82,560
C)$196,800
D)$397,440
E)-$195,200

Question

Answer the following question(s)using the information below:
Springfield Corporation, whose tax rate is 40%, has two sources of funds: long-term debt with a market value of $8,000,000 and an interest rate of 8%, and equity capital with a market value of $12,000,000 and a cost of equity of 12%.Springfield has two operating divisions, the Blue division and the Gold division, with the following financial measures for the current year:
 
-What is Economic Value Added (  )for the Gold Division?
A)-$283,200 
B)-$82,560 
C)$196,800 
D)$397,440 
E)-$195,200

Quizplus · Accepted Answer

The Answer of Answer the following question(s)using the information below:
Springfield Corporation, whose tax rate is 40%, has two sources of funds: long-term debt with a market value of $8,000,000 and an interest rate of 8%, and equity capital with a market value of $12,000,000 and a cost of equity of 12%.Springfield has two operating divisions, the Blue division and the Gold division, with the following financial measures for the current year:
 
-What is Economic Value Added (  )for the Gold Division?
A)-$283,200 
B)-$82,560 
C)$196,800 
D)$397,440 
E)-$195,200

Answer the Following Question(s)using the Information Below