A company with several divisions has a cost of capital of $6 \%$. An excerpt from Division B's accounting summary for the period is shown below:

The value of closing Capital Employed is $\$ 525,000$.

* Economic depreciation has been calculated to be $70,000

**Taking the total provision to $50,000.

*** Replacement cost has been estimated at $700,000 (after accounting for economic depreciation).

Ignore taxation, what is the economic value added (EVA) of the investment centre?

A. $142,500 B. $138,000 C. $135,000 D. $148,500

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Revenue Cost of sales $ 1,000,000 450,000 Gross profit 550,000 General administration costs 300,000 Accounting depreciation* 50,000 Increase in the provision for bad and doubtful debts** 25,000 Loan interest @ 5% 5,000 Net profit 170,000 Net assets at net book value*** 500,000 Bank loan 100,000