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3 years ago

Compute and Compare ROE, ROA, and RNOA

Business

1 answer:

FinnZ [79.3K]3 years ago

6 0

Answer:

ROE - 20.8%

ROA - 9.88%

RNOA - 20.33%

Explanation:

ROE = Net income / Average shareholder equity

Average shareholder equity = 48,633 + 46,878 / 2 = 47,770.50

ROE = 9,938 / 47,770.50

ROE = 20.8%

ROA = Net Income / Average Total Assets

Average total assets = 110,903 + 90,266 / 2 = 100,584.50

ROA = 9,938 / 100,584.50

ROA = 9.88%

RNOA = NOPAT / Average net Operating Assets

Average net Operating Assets = 56,535 + 51,447 / 2 = 53,991

NOPAT = Net Operating income before tax - Tax expense

NOPAT = 13,871 - 2,896 = 10,975

RNOA = 10,975 / 53,991

RNOA = 20.33%

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Answer:

9.85%

Explanation:

Data provided in the question:

Initial Offer price = $23.45

Current NAV = $22.28

Dividends and capital gains distributions over the year = $1.09 per share

Now,

Holding period return

= [Current NAV + Dividends and capital gains distributions - Initial Offer price ] ÷ Initial Offer price

= [ $24.67 + $1.09 - $23.45 ] ÷ $23.45

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= 0.0985

= 0.0985 × 100%

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3 years ago

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1 year ago

A sole proprietorship is: Select one: A. the easiest type of business to set up B. the least profitable type of business to set

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Answer:

it is an easiest type of business to set up because it requires small capital to start but has many disadvantages such as bearing all the risks alone.etc

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2 years ago

The management of California Corporation is considering the purchase of a new machine costing $400,000. The company's desired ra

Julli [10]

Answer:

c. 1.14

Explanation:

Year Cash Flow PV Factor 10% PV of Cash flows

($) ($)

Year 1 180,000 0.909 163,620

Year 2 120,000 0.826 99,120

Year 3 100,000 0.751 75,100

Year 4 90,000 0.683 61,470

Year 5 90,000 0.621 55,890

Total = 455,200

Initial cash outflow = $400,000

Cash inflow = $455,200

So, we can calculate the present value index by using following formula,

Present value index = Cash inflow ÷ Cash outflow

= $455,200 ÷ $400,000

= 1.14

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3 years ago

At project initiation: Select one: a. Few cost reduction opportunities exist and the cost of each change is large b. Few cost re

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Since the project has not commence the firm has lots of options to choose from and since the practical works has not started it's cheaper to substitute one method for another.

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3 years ago