Homework Answers
ANSWER:
(1)
net operating income before interest = $9100000 + $1030000 = $10130000
income tax rate = $3185000/$9100000 = 35%
NOPAT = $10130000 - 35% = $6584500
(2)
Invested capital = total assets - non-interest-bearing current liabilities
= $95000000 - $3500000
= $91500000
(3)
Return on income = NOPAT/invested capital
= $6584500/$91500000
= 7.20%
The company is not performing well as its ROI is not above cost of capital/required rate of return
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Exercise 12-8 For fiscal year 2017, Golden Products had income as follows: $54,000,000 Sales Less: Cost...
For fiscal year 2017, Crown Point Products had income as follows: Sales $55,600,000 Less: Cost of...
For fiscal year 2017, Crown Point Products had income as
follows:
Sales
$55,600,000
Less:
Cost
of goods sold
38,800,000
Selling and administrative expense
5,760,000
Interest expense
1,090,000
Income before taxes
9,950,000
Less income taxes
3,482,500
Net income
$6,467,500
Total assets were $99,000,000, and noninterest-bearing current
liabilities were $3,300,000. The company has a required rate of
return on invested capital equal to 10 percent.
Calculate NOPAT, invested capital, and ROI for Crown Point
Products. (Round ROI to 2 decimal places, e.g....
For fiscal year 2017, Sweetwater Products had income as follows: Sales $54,500,000 Less: Cost of goods...
For fiscal year 2017, Sweetwater Products had income as
follows:
Sales
$54,500,000
Less:
Cost of goods sold
38,200,000
Selling and administrative expense
5,750,000
Interest expense
1,010,000
Income before taxes
9,540,000
Less income taxes
3,339,000
Net income
$6,201,000
Total assets were $99,000,000, and noninterest-bearing current
liabilities were $3,500,000. The company has a required rate of
return on invested capital equal to 11 percent.
Calculate NOPAT, invested capital, and ROI for Sweetwater Products.
(Round ROI to 2 decimal places, e.g.
15.25%.)
NOPAT...
Exercise 12-9 For fiscal year 2018, Hiroole Department Store had net income of $6,090,000. Interest expense...
Exercise 12-9 For fiscal year 2018, Hiroole Department Store had net income of $6,090,000. Interest expense was $2,283,750, and the company's tax rate on income was 40 percent. Total assets were $74,848,000, and noninterest-bearing current liabilities were $6,268,500. The company's cost of capital (required rate of return) is 10 percent. Calculate NOPAT, invested capital, and residual income for Hiroole Department Store. (Enter negative answers preceding either - sign, e.g. -45 or in parentheses, e.g. (45).) NOPAT $ Invested capital $...
Toy Co Mills is a division of Iowa Woolen Products. For the most recent year, Toy Co had net income of $20,600,000. Incl...
Toy Co Mills is a division of Iowa Woolen Products. For the most
recent year, Toy Co had net income of $20,600,000. Included in
income was interest expense of $1,490,000. The operation’s tax rate
is 40 percent. Total assets of Toy Co Mills are $236,000,000,
current liabilities are $52,000,000, and $35,000,000 of the current
liabilities are noninterest bearing.
Calculate NOPAT, invested capital, and ROI for Toy Co Mills.
(Round ROI to 2 decimal places, e.g.
15.25%.)
NOPAT
$
Invested capital...
Ridgewood Mills is a division of Iowa Woolen Products. For the most recent year, Ridgewood had...
Ridgewood Mills is a division of Iowa Woolen Products. For the most recent year, Ridgewood had net income of $20,000,000. Included in income was interest expense of $1,450,000. The operation’s tax rate is 40 percent. Total assets of Ridgewood Mills are $230,000,000, current liabilities are $52,400,000, and $36,000,000 of the current liabilities are noninterest bearing. Calculate NOPAT, invested capital, and ROI for Ridgewood Mills. (Round ROI to 2 decimal places, e.g. 15.25%.) NOPAT $ Invested capital $ ROI %
Duffy Dog Mills is a division of Iowa Woolen Products. For the most recent year, Duffy...
Duffy Dog Mills is a division of Iowa Woolen Products. For the most recent year, Duffy Dog had net income of $19,400,000. Included in income was interest expense of $1,460,000. The operation’s tax rate is 40 percent. Total assets of Duffy Dog Mills are $237,000,000, current liabilities are $51,100,000, and $37,000,000 of the current liabilities are noninterest bearing. Calculate NOPAT, invested capital, and ROI for Duffy Dog Mills. (Round ROI to 2 decimal places, e.g. 15.25%.) NOPAT $ Invested capital...
For fiscal year 2018, Covington Department Store had net income of $6,070,000. Interest expense was $2,276,250,...
For fiscal year 2018, Covington Department Store had net income
of $6,070,000. Interest expense was $2,276,250, and the company’s
tax rate on income was 40 percent. Total assets were $72,238,000,
and noninterest-bearing current liabilities were $6,049,900. The
company’s cost of capital (required rate of return) is 10
percent.
Calculate NOPAT, invested capital, and residual income for
Covington Department Store. (Enter negative answers
preceding either - sign, e.g. -45 or in parentheses, e.g.
(45).)
NOPAT
$
Invested capital
$
Residual income...
For fiscal year 2018, Walla Walla Department Store had net income of $6,010,000. Interest expense was $2,253,750, and th...
For fiscal year 2018, Walla Walla Department Store had net
income of $6,010,000. Interest expense was $2,253,750, and the
company’s tax rate on income was 40 percent. Total assets were
$80,351,000, and noninterest-bearing current liabilities were
$7,148,100. The company’s cost of capital (required rate of return)
is 10 percent.
Calculate NOPAT, invested capital, and residual income for Walla
Walla Department Store. (Enter negative answers
preceding either - sign, e.g. -45 or in parentheses, e.g.
(45).)
NOPAT
$
Invested capital
$...
Macon Mills is a division of Bolin Products, Inc. During the most recent year, Macon had...
Macon Mills is a division of Bolin Products, Inc. During the most recent year, Macon had a net income of $44 million. Included in the income was interest expense of $2,900,000. The company's tax rate was 40%. Total assets were $470 million, current liabilities were $107,000,000, and $74,000,000 of the current liabilities are noninterest bearing. What are the invested capital and ROI for Macon? Enter your answer in whole dollar. Round "ROI" answer to two decimal places
Allen Products. Inc. Income Statement for the Year Ended December 31, 2019 Sales revenue Less: cost...
Allen Products. Inc. Income Statement for the Year Ended December 31, 2019 Sales revenue Less: cost of good sold Gross profits Less: operating expenses Operating profits Less: interest expense Net profit before taxes Less: taxes (rate 30%) Net profits after taxes $936,700 443,996 5492,704 211,694 $281,010 29,038 5251,972 75,592 $176,380 Allen Products, Inc. Income Statement for the Year Ended December 31, 2019 Sales revenue Less: cost of good sold 936,700 271,115 172,881 $492,704 Fixed Variable Gross profits Less: operating expenses...
For fiscal year 2017, Crown Point Products had income as
follows:
Sales
$55,600,000
Less:
Cost
of goods sold
38,800,000
Selling and administrative expense
5,760,000
Interest expense
1,090,000
Income before taxes
9,950,000
Less income taxes
3,482,500
Net income
$6,467,500
Total assets were $99,000,000, and noninterest-bearing current
liabilities were $3,300,000. The company has a required rate of
return on invested capital equal to 10 percent.
Calculate NOPAT, invested capital, and ROI for Crown Point
Products. (Round ROI to 2 decimal places, e.g....
For fiscal year 2017, Sweetwater Products had income as
follows:
Sales
$54,500,000
Less:
Cost of goods sold
38,200,000
Selling and administrative expense
5,750,000
Interest expense
1,010,000
Income before taxes
9,540,000
Less income taxes
3,339,000
Net income
$6,201,000
Total assets were $99,000,000, and noninterest-bearing current
liabilities were $3,500,000. The company has a required rate of
return on invested capital equal to 11 percent.
Calculate NOPAT, invested capital, and ROI for Sweetwater Products.
(Round ROI to 2 decimal places, e.g.
15.25%.)
NOPAT...
Exercise 12-9 For fiscal year 2018, Hiroole Department Store had net income of $6,090,000. Interest expense was $2,283,750, and the company's tax rate on income was 40 percent. Total assets were $74,848,000, and noninterest-bearing current liabilities were $6,268,500. The company's cost of capital (required rate of return) is 10 percent. Calculate NOPAT, invested capital, and residual income for Hiroole Department Store. (Enter negative answers preceding either - sign, e.g. -45 or in parentheses, e.g. (45).) NOPAT $ Invested capital $...
Toy Co Mills is a division of Iowa Woolen Products. For the most
recent year, Toy Co had net income of $20,600,000. Included in
income was interest expense of $1,490,000. The operation’s tax rate
is 40 percent. Total assets of Toy Co Mills are $236,000,000,
current liabilities are $52,000,000, and $35,000,000 of the current
liabilities are noninterest bearing.
Calculate NOPAT, invested capital, and ROI for Toy Co Mills.
(Round ROI to 2 decimal places, e.g.
15.25%.)
NOPAT
$
Invested capital...
For fiscal year 2018, Covington Department Store had net income
of $6,070,000. Interest expense was $2,276,250, and the company’s
tax rate on income was 40 percent. Total assets were $72,238,000,
and noninterest-bearing current liabilities were $6,049,900. The
company’s cost of capital (required rate of return) is 10
percent.
Calculate NOPAT, invested capital, and residual income for
Covington Department Store. (Enter negative answers
preceding either - sign, e.g. -45 or in parentheses, e.g.
(45).)
NOPAT
$
Invested capital
$
Residual income...
For fiscal year 2018, Walla Walla Department Store had net
income of $6,010,000. Interest expense was $2,253,750, and the
company’s tax rate on income was 40 percent. Total assets were
$80,351,000, and noninterest-bearing current liabilities were
$7,148,100. The company’s cost of capital (required rate of return)
is 10 percent.
Calculate NOPAT, invested capital, and residual income for Walla
Walla Department Store. (Enter negative answers
preceding either - sign, e.g. -45 or in parentheses, e.g.
(45).)
NOPAT
$
Invested capital
$...
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