Question: The following information is reported for the current year for North Atlantic Division of XT Enterprises: Sales $3,800,000 Interest expense $250,000 Net income $500,000 Total

The following information is reported for the current year for North Atlantic Division of XT Enterprises:

Sales $3,800,000
Interest expense $250,000
Net income $500,000
Total assets $5,000,000
Noninterest-bearing current liabilities $400,000
Cost of capital 8%
Required rate of return 14%
Tax rate 30%

How much is the divisions invested capital?

$5,400,000

$5,000,000

$4,600,000

$5,500,000

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