Answer:
Total amound paid to shareholder in 3rd year = $1850
Explanation:
Below is the calculation:
Total dividend paid = 1st year divident + 2nd year divident + 3rd year dividend
Total dividend paid = $10000 + 12500 + 14000
Total dividend paid = $36500
Total preferred dividend = (2100 x 100) x 5.5% x 3
Total preferred dividend = $34650
Total amount of dividend paid to shareholder during 3rd year = 36500 - 34650 = $1850
Total amound paid to shareholder in 3rd year = $1850
Answer:
A
Explanation:
Because as per time the value of money the future cash holds are discounted at discount rate yo find the present Worth, thus the higher value of early present cash flows creates higher present value compared to lower value of early cash flows
Answer:40,000+3650=43650 income
Explanation:
Answer:
$5,000
Explanation:
The return on investment is 20%
= 20/100
=0.2
The average operating assets is $100,000
The minimum required rate of return is 15%
= 15/100
= 0.15
The first step is to calculate the net operating assets
= ROI× average operating assets
= 0.2×100,000
= $20,000
Therefore, the residual income can be calculated as follows
= Net operating income-(minimum required rate of return×average operating assets)
= $20,000-($100,000-0.15)
= $20,000-15,000
= $5,000
Hence the residual income for the year was closest to $5,000
