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Kernel Industries has two sources of funds: long-term debt with a market and book value...

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Accounting

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 $480,000 $2,000,000 $100,000

Austin $600,000 $4,000,000 $300,000

New Orleans $1,020,000 $6,000,000 $600,000

What is the EVA for St. Augustine?

$127,870

$163,730

$196,270

$360,000

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