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Gala2k [10]
3 years ago
8

Garcia Company reports the following information: Net operating income after taxes $100,000 Before-tax operating income $300,000

Average invested capital $500,000 After-tax cost of capital 10% What is the residual income for Garcia Company? A) $30,000 B) $50,000 C) $250,000 D) $450,000
Business
1 answer:
Andrew [12]3 years ago
7 0

Answer:

B) $50,000

Explanation:

Cost of Capital is the rate which is required by the capital investment by the shareholders or owners of the business. Residual Income is the portion of net income after paying the investors of the company. This income is reinvested or retained by the business.

Net operating Income after tax = $100,000

Average Invested Capital = $500,000

Cost of Capital = $500,000 x 10% = $50,000

Residual Income = Net Income - Cost of capital

Residual Income = $100,000 - $50,000

Residual Income = $50,000

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The activities of the federal reserve board have the most direct influence on.
mamaluj [8]

Answer:

The activities of the Federal Reserve Board have the most direct influence on: bank interest rates, monetary policy (interest rates, credit, etc.) 

7 0
2 years ago
You're responsible for managing your company's social media accounts. your colleague tells you about how a lot of businesses are
Ann [662]
If the pinterest account is helpful in promoting the content of the company and it is reliable for having to give a high reputation of the company that I would put into consideration the offer of my colleague if it meant of having to promote the company's name and reputation.
4 0
3 years ago
A bond has a 7.5% annual coupon rate with 4 years to maturity and pays annual coupon. par value is $1000
AveGali [126]

Answer:

1.1 Inflow (Coupon payment ) = $1000 * 7.5% = $75

  Year     Inflows    Pvf at 5%     Present value

      1            75        0.952381     71.43

      2            75       0.907029    68.03

      3            75       0.863838     64.79

      4            75       0.822702     61.70

      4           1000    0.822702     822.70

   Total                                       1,088.65

Price of Bond, when yield to maturity is 5% = $1088.65

1.2   Year     Inflows    Pvf at 5.2%     Present value

           1            75          0.95057           71.29

          2            75          0.9035839        67.77

          3            75          0.85892             64.42

          4            75          0.816464            61.23  

          4          1000        0.816464            816.46

Total                                                           1,081.18

Price of Bond, when yield to maturity is 5.2% =$1081.18

1.3  Change in price of Bond = (Decrease in price of bond / price of bond ) * 100

= $7.47 / 1088.65 *100

= 0.69%

Change in price of Bond when yield increases by 0.2%( i.e Decrease in price of bond)

= $1088.65 - $ 1081.18

= $7.47

1.4   Year    Inflows    Pvf at 5%       P. value    Year*P. value

        1          75          0.9523809    71.43            71.43

        2         75          0.907029       68.03           136.05

        3         75          0.863838        64.79           194.36

        4         75          0.822702        61.70            246.81

        4        1000       0.822702       822.70         3,290.81

     Total                                           1,088.65        3,939.47

Modified duration = Bond duration / ( 1+YTM)

= 3.6187 / ( 1+0.05)

= 3.446

Bond Duration = Sum of (PV of inflows) / Sum of (Year*PV of inflows)

= $3,939.47 / $1088.65

= $3.6187

1.5 % Change in price of bond = (-1 * Modified duration * % change in YTM in term of basis point)

= ( -1 * 3.446 * 0.2)

= -0.69 %

6 0
3 years ago
he appropriate discount rate for the following cash flows is 8 percent compounded quarterly. Year Cash Flow 1 $700 2 700 3 0 4 1
rewona [7]

Answer:

Thus, the present value is $2045.52.

Explanation:

Use the below formula to find the present value:

Present value = FV ÷ (1 + r/4)^(n*4)

Present value :

=\frac{700}{(1 + \frac{0.08}{4} )^{1 \times 4} } + \frac{700}{(1 + \frac{0.08}{4} )^{2 \times 4} } + \frac{0}{(1 + \frac{0.08}{4} )^{3 \times 4} } +\frac{1100}{(1 + \frac{0.08}{4} )^{4 \times 4} } \\ \\= \frac{700}{1.0824}+\frac{700}{1.1716} +0+\frac{1100}{1.3727} \\= 2045.52

Thus, the present value is $2045.52.

4 0
2 years ago
Why is it important for a company to pay attention to its
Luden [163]

The company needs to make sure its suppliers are providing products at the lowest cost reason it is important for a company to pay attention to its supply chain when practicing CSR.

<h3>What is CSR?</h3>

Corporate social responsibility CSR is a concept where a business engages in activities that makes it accountable to a wide range of stakeholders.

Corporate social responsibly make businesses corporate citizens. A business shares some of its profits with society by funding projects and programs that benefit the community.

Hence, the company needs to make sure its suppliers are providing products at the lowest cost reason it is important for a company to pay attention to its supply chain when practicing CSR.

Learn more about CSR here : brainly.com/question/14624782

8 0
2 years ago
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