1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
IrinaK [193]
3 years ago
5

The following information is provided for each division. Investment Center Net Income Average Assets Cameras and camcorders $ 4,

500,000 $ 20,000,000 Phones and communications 1,500,000 12,500,000 Computers and accessories 800,000 10,000,000 Assume a target income of 12% of average invested assets. Required: Compute residual income for each division. (Enter losses with a minus sign.)
Business
1 answer:
Delicious77 [7]3 years ago
6 0

Answer:

Cameras & Camcorders = $2,100,000

Phones & Communication  = 0

Computers &Accessories  = -$400,000

Explanation:

Computation of the given data are as follow:-

Target Income = Average Assets × Target Income Rate of Average Invested Assets

Cameras & Camcorders = $20,000,000 × 12÷100 = $2,400,000

Phones &Communication = $12,500,000 × 12÷100 =  $1,500,000

Computers &Accessories = $10,000,000 × 12÷100 = $1,200,000

Residual Income = Net Income - Target Income

Cameras & Camcorders = $4,500,000 - $2,400,000 = $2,100,000

Phones & Communication = $1,500,000 - $1,500,000 = 0

Computers &Accessories = $800,000 - $1,200,000 = -$400,000

You might be interested in
Sylvia's Housecleaning Service provides housecleaning services to its clients. The company uses an activity-based costing system
nataly862011 [7]
The answer is c , assume compan used traditional costing stystem
5 0
3 years ago
A firm is considering a project with an annual cash flow of $300,000. The project would have a five year life, and the company u
nignag [31]

Answer:

Hence, the the maximum amount the company could invest in the project is $1081432.86  and yes, the project should be accepted as the value is greater than initial investment.

Therefore, the correct option is b. $1,081,434

Explanation:

Here, maximum amount means the sum of present value of all cash inflows

So,

Present value = all Year cash inflows × Discounted factor of each year

where,

Year 1, year 2, year 3, year 4, and year 5 have same cash flows i.e. $300,000

But the discounted factor is different in each year

The calculation of discounted factor = 1 ÷ (1+0.12) ^ 1

where,

0.12 = rate

^1 = for year 1, ^2 = for year 2 and so on.

The discounted rate for year 1, , year 2, year 3, year 4, and year 5 is 0.8929

, 0.7972

, 0.7118

, 0.6355

, 0.5674  respectively.

Now, multiply the cash flow amount with discounted rate for each year to get presented value of all years.

Year 1 = $300,000 × 0.8929 = $267,857.14

Year 2 = $300,000 × 0.7972 = $239,158.16

Year 3 = $300,000 × 0.7118  = $213,534.07

Year 4 = $300,000 × 0.6355 = $190,655.42

Year 5 = $300,000 × 0.5674  = $170,228.06

Then, sum all the presented values of all year to get maximum amount

= $267,857.14  +  $239,158.16  + $213,534.07  + $190,655.42  + $170,228.06

= $1,081,432.86

So, we attached the sheet for better understanding.

Hence, the the maximum amount the company could invest in the project is $1081432.86  and yes, the project should be accepted as the value is greater than initial investment.

Therefore, the correct option is b. $1,081,434

7 0
3 years ago
During 2011, Simon Kidman, the sole shareholder of a calendar year S corporation, received a distribution of $75,000. On Decembe
liraira [26]

Answer: c. Kidman recognizes a $1,000 LTCG

Explanation:

Long term gain can be calculated by the formula:

Capital gain = Distribution received - Basis in stock - Ordinary income earned

= 75,000 - 24,000 - 50,000

= $1,000

Long Term Capital gain is therefore $1,000.

3 0
3 years ago
Home of households, inc., has an appliance manufacturing plant in the chicago area. the company specializes in producing smaller
Allushta [10]

Answer:

Exporting.

Explanation:

Exporting is the process where goods and sert are produced on one country and sold to buyers in another country. Usually contries produce goods they in which they incur low cost compared to other countries for export.

Home of households produces smaller washers and dryers for countries where consumers have less living space. So they are exporting.

6 0
3 years ago
Spice asks Meyers about how a fixed-income manager would position his portfolio to capitalize on expectations of increasing inte
Artist 52 [7]

Answer:

a. Shorten his portfolio duration

Explanation:

The best action to take in order to capitalize on expectations of increasing interest rates would be to shorten his portfolio duration. This is because an increase in the interest rate causes his portfolio value to decrease, yet if the duration of his portfolio is shortened then the change/decrease in value will be lesser than if done otherwise.

4 0
3 years ago
Other questions:
  • Q 7.39: In a small-town retail store, the sales clerk is responsible for counting the cash in the cash register and comparing it
    5·1 answer
  • Consider the following transactions for Thomas Company and their effect on the accounting equation. Click on each transaction fo
    11·1 answer
  • A customer comes into your shop carrying a gorgeous oval bowl. It’s very large and low, and has a pale gray crackled glaze. He t
    11·2 answers
  • On Friday Huron Investments stock closes at $5.35. The Huron Investments 8.125% Convertible debenture maturing September 13, 204
    6·1 answer
  • The result of market research are used to identify the for a product
    10·1 answer
  • Acheson Corporation, which applies manufacturing overhead on the basis of machine-hours, has provided the following data for its
    12·1 answer
  • Is the South African post office a natural or artificial monopoly?motivate​
    9·1 answer
  • Please help
    7·1 answer
  • A job applicant identifies preparing contract documents for construction managers as something the applicant considers
    13·1 answer
  • Economist Thomas Piketty criticized executive compensation levels and thought CEOs should be satisfied with:
    15·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!