QUESTION 4
Heatherton corp. is a therapy service provider that strongly believes in using multiple financial measures to evaluate the performance of its divisions. The Chattanooga, TN facility has the following operation and performance information:
Sales revenue | 1000000 |
Operating income | 200000 |
Total Assets | 1250000 |
Current liabilities | 249000 |
Debt ( @ 8% interest) | 570000 |
Common equity | 430000 |
Tax rate | 20% |
Required Rate of Return | 9% |
What is their residual income using total assets as the measure of investment?
12.5 points
QUESTION 5
Heatherton corp. is a therapy service provider that strongly believes in using multiple financial measures to evaluate the performance of its divisions. The Chattanooga, TN facility has the following operation and performance information:
Sales revenue | 1300000 |
Operating income | 190000 |
Total Assets | 1240000 |
Current liabilities | 247000 |
Debt ( @ 9% interest) | 620000 |
Common equity | 430000 |
Tax rate | 30% |
Required Rate of Return | 14% |
What is their residual income the using measure of investment most commonly used in EVA?
12.5 points
QUESTION 6
Heatherton corp. is a therapy service provider that strongly believes in using multiple financial measures to evaluate the performance of its divisions. The Chattanooga, TN facility has the following operation and performance information:
Sales revenue | 1300000 |
Operating income | 190000 |
Total Assets | 1240000 |
Current liabilities | 247000 |
Debt ( @ 9% interest) | 620000 |
Common equity with a 12% cost of equity | 430000 |
Tax rate | 30% |
Required Rate of Return | 14% |
What is Heatherton's Weighted Average Cost of Capital that would be used in EVA?
12.5 points
QUESTION 7
Heatherton corp. is a therapy service provider that strongly believes in using multiple financial measures to evaluate the performance of its divisions. The Chattanooga, TN facility has the following operation and performance information:
Sales revenue | 1000000 |
Operating income | 200000 |
Total Assets | 1200000 |
Current liabilities | 250000 |
Debt ( @ 8% interest) | 610000 |
Common equity with a 12% cost of equity | 440000 |
Tax rate | 20% |
Required Rate of Return | 9% |
What is Heatherton's after tax income that would be used in EVA?
12.5 points
QUESTION 8
Heatherton corp. is a therapy service provider that strongly believes in using multiple financial measures to evaluate the performance of its divisions. The Chattanooga, TN facility has the following operation and performance information:
Sales revenue | 1300000 |
Operating income | 190000 |
Total Assets | 1260000 |
Current liabilities | 250000 |
Debt ( @ 6% interest) | 590000 |
Common equity with a 12% cost of equity | 440000 |
Tax rate | 20% |
Required Rate of Return | 12% |
What is Heatherton's EVA?
QUESTION 4 Heatherton corp. is a therapy service provider that strongly believes in using multiple financial...
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