Anders Company provided the following information: Turnover 1.4 Average operating assets $120,000 Operating income $6,720 If...
Anders Company provided the following information:
|
Turnover |
1.4 |
|
Average operating assets |
$120,000 |
|
Operating income |
$6,720 |
If the imputed interest rate is 6%, what is Anders Company residual income for the year?
a.$2,400
b.($2,400)
c.$480
d.($480)
Homework Answers
Answer: d.($480)
Explanation
Residual income = Net operating income - (Average operating assets x Minimum required rate of return)
= $6,720 - ($120,000 x 6%)
= $6,720 - $ 7,200 = ($480)
Add Answer to:
Anders Company provided the following
information:
Turnover
1.4
Average operating assets
$120,000
Operating income
$6,720
If...
Anders Company provided the following information: Turnover 1.4 Average operating assets $120,000 Operating income $6,720 What...
Anders Company provided the following information: Turnover 1.4 Average operating assets $120,000 Operating income $6,720 What is margin? c.Cannot be determined from the above information. A company had WACC (weighted average cost of capital) equal to 8.96% If the company pays off mortgage bonds with an interest rate of 4% and issues an equal amount of new stock considered to be relatively risky by the market, which of the following is true? a.residual income will increase. b.WACC will decrease. c.ROI...
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