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What is the eva for st augustine

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Kernel Industries has two sources of funds: long-term debt with a market and book value of $5 million issued at an interest rate of 12%, and equity capital that has a market value of $4 million (book value of $2 million). Kernel Industries has profit centers in the following locations with the following operating incomes, total assets, and current liabilities. The cost of equity capital is 12%, while the tax rate is 25%.

                              Operating income               Assets                Current liabilities
St. Augustine         $480000                        $2000000              $100000
Austin                  $600000                         $4000000                    $300000
New Orleans              $1020000               $6000000                       $600000

Problem1 : What is the EVA for St. Augustine?

A.$127,870
B.$163,730
C.$196,270
D.$360,000

Reference no: EM132793015

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