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My name is Ann [436]
2 years ago
15

Holo Company reported the following financial numbers for one of its divisions for the year; average total assets of $5,800,000;

sales of $5,375,000; cost of goods sold of $3,225,000; and operating expenses of $1,147,000. Assume a target income of 15% of average invested assets. Compute residual income for the division:a. $100,300.
b. $196,750.
c. $150,500.
d. $133,000.
e. $150,450
Business
1 answer:
kondaur [170]2 years ago
6 0

Answer:

Option D

Residual income= $133,000

Explanation:

<em>Residual Income is measure of how much a division or a part of a business is able to generate over and above the company-wide opportunity cost of capital.  </em>

<em>A division with a controllable profit over and margin over and above the cost of fund is evaluated to be profitable .  </em>

Residual income = Controllable margin - (cost of capital(%)× operating assets)  

cost of capital = target ROI = 15%

controllable profit= 5,375,000- 3,225,000- 1,147,000

                             = 1003000

Residual income =  1,003,000 -(15%×5,375,000)

                            = $133,000

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Whitepunk [10]

Answer:

The change in net working capital for the year is $50,000

Explanation:

Net working capital is the difference between Current assets and current liabilities. Change in net working capital is the difference between net working capital at the beginning and st the end.

current assets at the beginning =( 300+400+800)=1500

Current assets at the end = ( 350+450+300)= 1100

current liabilities at the beginning = (300+1000)= 1300

current liabilities at the end = (350+600)= 950

net working capital at the beginning = 1500 - 1300= 200

net working capital at the end = 1100 - 950= 150

therefore the change in net working capital for the year is 200 - 150 =50 000

8 0
3 years ago
It will be difficult to institute fiscal policy in a stabilizing manner because politicians will find
faltersainse [42]

It will be difficult to institute fiscal policy in a stabilizing manner because politicians will find budget deficit more attractive during recession.

<h3>What is budget deficit?</h3>

Budget deficit occur when the government spending or expenditure is more than the revenue.

It will be hard to institute fiscal policy based on the fact that  politicians will find budget deficit more attractive during recession in which on the other hand they will be unwilling to run budget surplus when their is  an expansion.

Therefore they will find budget deficit more attractive during recession.

Learn more about budget deficit here:brainly.com/question/26010226

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3 0
2 years ago
This year henry realized a gain on the sale of an antique car that he inherited from his uncle. the buyer has promised to pay he
Kruka [31]
The answer to this question is <span>Wherewithal to pay
In the wherewithal to pay concept,  the</span><span> Income will be recognized in the period in which the company has the means to </span>pay<span> the tax on the income. Often times, company make their report to show a loss on purpose in order to postpone the tax payments</span>
4 0
3 years ago
Maxwell Communications paid a dividend of $1.35 last year. Over the next 12 months, the dividend is expected to grow at 11 perce
PilotLPTM [1.2K]

Answer:

Current dividend paid (Do) = $1.35

Growth rate (g) = 11% = 0.11

Cost of equity (ke) = 24% = 0.24

Po = Do<u>(1 + g)</u>    

           Ke - g

Po = $1.35<u>(1 + 0.11)</u>

                 0.24 - 0.11

Po = <u>$1.4985</u>

            0.13

Po = $11.53                                                                                                                                                                                                                

Explanation:

The current market price of the stock is a function of current dividend paid, subject to growth rate, divided by the current market price of the stock.

4 0
3 years ago
You sold a car and accepted a note with the following cash flow stream as your payment. What was the effective price you receive
alexandr1967 [171]

Answer:

The effective price you received for the car was $5,987

Explanation:

Effective price of the car can be calculated by the Net Present values of all the cash flows associated with the note.

Using following present value formula for each cash flows

Pv = FV  / ( 1 + r )^n

Net Present Value of all call flows = [ $1,000 / ( 1 + 6% )^1 ] + [ $2,000 / ( 1 + 6% )^2 ] +  [ $2,000 / ( 1 + 6% )^3 ] + [ $2,000 / ( 1 + 6% )^4 ]

NPV = $943.4 + 1,780 + $1,679.24 + $1,584.19 = $5,986.83 = $5,987

8 0
3 years ago
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