Question

QUESTION 3 Jane Doe is a private company which a management accountant is analyzing its performance. So it is trying to look at different components that are distributing to its success. The tests he wants to carry out are the following using the table below: Cash Account receivable Land bought for speculation Personal car PPE for the business Accumulated depreciation EBITDA EBIT Tax rate Net income Sales Cost of capital Debt 4500 25600 250000 15000 420000 36400 29800 23000 30% 19500 56200 12% REQUIRED 6. Calculate the operating assets of the company. 7. Calculate Return on Investment 8. Calculate residual income

Answer 1

6Conopetation ep aperatang assets of the Company oash Accocents receivable Ppe Per buiness u20000-s6400) Operating assets 25600 383600 413 700 Note-Larsl baughtor speccdation and C be nct considered as personal Car paratng aslets Retur onGnvestmment -Net acome Operatang assets - 3(950b 100 $413700 Rol 8 pesideel Gcome E Net ncowe-mi regcired rate af returD 19500-CS43 32ak 12) $1a500-49644 2esfdual Arene closs)- c3ol4