JRT Enterprises has long-term debt with a market value of $2,000,000 and equity with a market value of $3,000,000. For the company, the cost of debt is 15%, while the cost of equity is 10%. The company’s total assets are $800,000. During 2011, JRT reported after-tax profit of $550,000. Information related to the company’s debt on its statement of financial position is shown below:
|
Liabilities |
|
|
Accounts payable |
$50,000 |
|
Current portion of long-term loan |
150,000 |
|
Total current liabilities |
$200,000 |
|
Long-term debt |
|
|
Bank loan |
1,850,000 |
|
Total long-term debt |
1,850,000 |
|
Total liabilities |
$2,050,000 |
What is the EVA for JRT Enterprises?
- $478,000
- $460,000
- $472,000
- $490,000