People's Contrution Company has set a 15% required minimum rate of return m. The company's CFO...
Homework Answers
Residual income
= Operating income - Required return on investment
= 25,000 - (125,000*15%)
= 25,000 - 18,750
= 6,250
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People's Contrution Company has set a 15% required minimum rate of
return m. The company's CFO...
QUESTION 3 3. Robotics Inc. has a minimum required rate of return of 10%. The company...
QUESTION 3 3. Robotics Inc. has a minimum required rate of return of 10%. The company currently has net operating income of $275,000 with average operating assets of $1,718,750. The company is considering a new project that will increase net operating income by $32,000 and increase average operating assets by $265,000. By how much will the company's residual income increase or decrease if they took on this new project? (if decrease in residual income, enter negative sign before number) 1...
A company has a minimum required rate of return of 9%. The company is considering investing...
A company has a minimum required rate of return of 9%. The company is considering investing in a factory machine which costs $75,000 and has an expected life of three years. The machine has a zero salvage value and will be depreciated using the straight-line depreciation method. The company expects to generate an extra $5,000 of net income each of the next 3 years because of this new factory machine and extra annual cash flows of $30,000 each of the...
What is Residual income for Galaxy Company if operating income for the period is $125,000, average...
What is Residual income for Galaxy Company if operating income for the period is $125,000, average operating assets are $550,000 Select one a. $35,000 O b. $25,000 O c. $26.000 d. $36,000 for the period is $125,000, average operating assets are $550,000 and minimum required rate of return is 18%?
Rachael Corporation uses residual income to evaluate the performance of its divisions. The company's minimum required...
Rachael Corporation uses residual income to evaluate the performance of its divisions. The company's minimum required rate of return is 11%. In April, the Commercial Products Division had average operating assets of $100,000 and net operating income of $20,000. What was the Commercial Products Division's residual income in April? Group of answer choices A. $9,000 B. $80,000 C. $79,000 D. $20,000
Problem 11-15 Return on Investment (ROI) and Residual Income [LO11-1, LO11-2] Problem 11-15 Return on Investment...
Problem 11-15 Return on Investment (ROI) and Residual Income
[LO11-1, LO11-2]
Problem 11-15 Return on Investment (ROI) and Residual Income [LO11-1, LO11-2] Ending Balance Financial data for Joel de Paris, Inc., for last year follow: Joel de Paris, Inc. Balance sheet Beginning Balance Assets Cash $ 125,000 Accounts receivable 339,000 Inventory 570,000 Plant and equipment, net 826,000 Investment in Buisson, S.A. 398,000 Land (undeveloped) 250,000 Total assets $ 2,508,000 Liabilities and stockholders' Equity Accounts payable $ 371,000 Long-term debt 976,000...
Problem 11-15 Return on Investment (ROI) and Residual Income [LO11-1. LO11-2] Financial data for Joel de...
Problem 11-15 Return on Investment (ROI) and Residual Income [LO11-1. LO11-2] Financial data for Joel de Paris, Inc, for last year follow 1 de Paris, Inc Balance Sheet Ending Beginning Assets Cash Accounts receivable Inventory Plant and equipment, net Investment in Buisson, S.A Land (undeveloped) Total assets s 140,80012,000 456,808 328,880 688,600 258,800 188,080 530,000 380,800 620,980 288,888 170,908 $ 2,828,98032,100,8 Liabilities and Stockholders Equity Accounts payable Long-term debt Stockholders equity S360,8803S310,880 1,500,000 1,580,800 168,000 ::: m 290,aee Total liabilities...
Problem 11-15 Return on Investment (ROI) and Residual Income (LO11-1, LO11-2) Financial data for Joel de...
Problem 11-15 Return on Investment (ROI) and Residual Income (LO11-1, LO11-2) Financial data for Joel de Paris, Inc., for last year follow: Joel de Paris, Inc. Balance Sheet Beginning Balance Ending Balance Assets Cash Accounts receivable Inventory Plant and equipment, net Investment in Buisson, S.A. Land (undeveloped) Total assets Liabilities and Stockholders' Equity Accounts payable Long-term debt Stockholders' equity Total liabilities and stockholders' equity $ 127,000 337,000 576,000 890,000 410,000 245,000 $ 2,585,000 $ 125,000 472,000 478,000 895,000 434,000 252,000...
2. Bradley Company's required rate of return is 10%. The company has an opportunity to be...
2. Bradley Company's required rate of return is 10%. The company has an opportunity to be the exclusive distributor of a very popular consumer item. No new equipment would be needed, but the company would have to use one-fourth of the space in a warehouse it owns. The warehouse cost $200,000 new. The warehouse is currently half-empty and there are no other plans to use the empty space. In addition, the company would have to invest $120,000 in working capital...
2. The following data has been provided for a company's most recent year of operations: Return...
2.
The following data has been provided for a company's most recent year of operations: Return on investment Average operating assets Minimum required rate of return 32% $40,000 20% The residual income for the year was closest to: Given the following data: Average operating assets Total liabilities Sales Contribution margin Net operating income $688,000 $ 103, 200 $344,000 $196,080 $ 61,920 Return on investment (ROI) is: BR Company has a contribution margin of 8%. Sales are $497,000, net operating income...
Problem 11-15 Return on Investment (ROI) and Residual Income (LO11-1, LO11-2] Financial data for Joel de...
Problem 11-15 Return on Investment (ROI) and Residual Income (LO11-1, LO11-2] Financial data for Joel de Paris, Inc., for last year follow. Joel de Paris, Inc. Balance Sheet Beginning Balance Ending Balance Assets Cash Accounts receivable Inventory Plant and equipment, net Investment in Buisson, S.A. Land (undeveloped) Total assets Liabilities and Stockholders' Equity Accounts payable Long-term debt Stockholders' equity Total liabilities and stockholders' equity 335, eee 568, eee 865.000 406, eee 250, eee 2,556,000 $ 129,080 476,000 477.eee 858.000 434,eee...
QUESTION 3 3. Robotics Inc. has a minimum required rate of return of 10%. The company currently has net operating income of $275,000 with average operating assets of $1,718,750. The company is considering a new project that will increase net operating income by $32,000 and increase average operating assets by $265,000. By how much will the company's residual income increase or decrease if they took on this new project? (if decrease in residual income, enter negative sign before number) 1...
What is Residual income for Galaxy Company if operating income for the period is $125,000, average operating assets are $550,000 Select one a. $35,000 O b. $25,000 O c. $26.000 d. $36,000 for the period is $125,000, average operating assets are $550,000 and minimum required rate of return is 18%?
Problem 11-15 Return on Investment (ROI) and Residual Income
[LO11-1, LO11-2]
Problem 11-15 Return on Investment (ROI) and Residual Income [LO11-1, LO11-2] Ending Balance Financial data for Joel de Paris, Inc., for last year follow: Joel de Paris, Inc. Balance sheet Beginning Balance Assets Cash $ 125,000 Accounts receivable 339,000 Inventory 570,000 Plant and equipment, net 826,000 Investment in Buisson, S.A. 398,000 Land (undeveloped) 250,000 Total assets $ 2,508,000 Liabilities and stockholders' Equity Accounts payable $ 371,000 Long-term debt 976,000...
Problem 11-15 Return on Investment (ROI) and Residual Income [LO11-1. LO11-2] Financial data for Joel de Paris, Inc, for last year follow 1 de Paris, Inc Balance Sheet Ending Beginning Assets Cash Accounts receivable Inventory Plant and equipment, net Investment in Buisson, S.A Land (undeveloped) Total assets s 140,80012,000 456,808 328,880 688,600 258,800 188,080 530,000 380,800 620,980 288,888 170,908 $ 2,828,98032,100,8 Liabilities and Stockholders Equity Accounts payable Long-term debt Stockholders equity S360,8803S310,880 1,500,000 1,580,800 168,000 ::: m 290,aee Total liabilities...
Problem 11-15 Return on Investment (ROI) and Residual Income (LO11-1, LO11-2) Financial data for Joel de Paris, Inc., for last year follow: Joel de Paris, Inc. Balance Sheet Beginning Balance Ending Balance Assets Cash Accounts receivable Inventory Plant and equipment, net Investment in Buisson, S.A. Land (undeveloped) Total assets Liabilities and Stockholders' Equity Accounts payable Long-term debt Stockholders' equity Total liabilities and stockholders' equity $ 127,000 337,000 576,000 890,000 410,000 245,000 $ 2,585,000 $ 125,000 472,000 478,000 895,000 434,000 252,000...
2. Bradley Company's required rate of return is 10%. The company has an opportunity to be the exclusive distributor of a very popular consumer item. No new equipment would be needed, but the company would have to use one-fourth of the space in a warehouse it owns. The warehouse cost $200,000 new. The warehouse is currently half-empty and there are no other plans to use the empty space. In addition, the company would have to invest $120,000 in working capital...
2.
The following data has been provided for a company's most recent year of operations: Return on investment Average operating assets Minimum required rate of return 32% $40,000 20% The residual income for the year was closest to: Given the following data: Average operating assets Total liabilities Sales Contribution margin Net operating income $688,000 $ 103, 200 $344,000 $196,080 $ 61,920 Return on investment (ROI) is: BR Company has a contribution margin of 8%. Sales are $497,000, net operating income...
Problem 11-15 Return on Investment (ROI) and Residual Income (LO11-1, LO11-2] Financial data for Joel de Paris, Inc., for last year follow. Joel de Paris, Inc. Balance Sheet Beginning Balance Ending Balance Assets Cash Accounts receivable Inventory Plant and equipment, net Investment in Buisson, S.A. Land (undeveloped) Total assets Liabilities and Stockholders' Equity Accounts payable Long-term debt Stockholders' equity Total liabilities and stockholders' equity 335, eee 568, eee 865.000 406, eee 250, eee 2,556,000 $ 129,080 476,000 477.eee 858.000 434,eee...
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