Answer the following questions using the information below:
Echidna Company has two sources of funds: long-term debt with a market and book value of $30 million issued at an interest rate of 10%,and equity capital that has a market value of $18 million (book value of $5 million) .Echidna Company has profit centres in the following locations with the following operating profits,total assets,and current liabilities.The cost of equity capital is 15%,while the tax rate is 30%.
-What is the EVA for Broken Hill?
A) $2 678 500
B) $2 337 400
C) $2 806 126
D) $2 630 126
Correct Answer:
Verified
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