Roterblade Company supplies helicopters to corporate clients. Roterblade has two sources of funds: long term debt...

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Roterblade Company supplies helicopters to corporate clients. Roterblade has two sources of funds: long term debt with a market and book value of $32 million Issued at an interest rate of 10%, and equity capital that has a market value of $18 million (book value of $8 million). The cost of equity capital for Roterblade is 15%, and its tax rate is 30%. Roterblade has profit centers in four divisions that operate autonomously. The company's results for 2020 are as follows: New York Chicago Dallas Los Angeles Operating Income $1,750,000 2.400.000 Assets Current Liabilities $11,500,000 $2.500.000 9.000.000 3.500.000 4,675,000 27,500,000 9,500,000 4,200,000 25.000.000 8.000.000 Compute the Dallas division's Economic Value Added Roterblade Company supplies helicopters to corporate clients. Roterblade has two sources of funds: long term debt with a market and book value of $32 million Issued at an interest rate of 10%, and equity capital that has a market value of $18 million (book value of $8 million). The cost of equity capital for Roterblade is 15%, and its tax rate is 30%. Roterblade has profit centers in four divisions that operate autonomously. The company's results for 2020 are as follows: New York Chicago Dallas Los Angeles Operating Income $1,750,000 2.400.000 Assets Current Liabilities $11,500,000 $2.500.000 9.000.000 3.500.000 4,675,000 27,500,000 9,500,000 4,200,000 25.000.000 8.000.000 Compute the Dallas division's Economic Value Added

Answer rating: 100% (QA)

To calculate the Economic Value Added EVA for the Dallas division of Roterblade Company we need to c... View the full answer