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
<span>Consumers are willing to purchase a product up to the point where the marginal benefit of consuming a product is equal to its price.
</span>The term marginal benefit denotes the<span> benefit to a consumer receives from consuming one more unit of a good or service.
</span><span>On the other hand, marginal cost is the additional cost to a firm of producing one more unit of a good or service.</span>
Answer:
See below
Explanation:
1. The current ratio is the sum of current assets divided by current liabilities. It used to measure the ability of the airlines accessories to meet its short term obligation due within a year
Current ratio = $93 million + $85 million + $9 million / $80 million + $26 million
Current ratio = $187 million / $106 million
Current ratio = 1.76:1
Current ratio = 1.76 times
2. Acid test ratio. This measure liquidity but with adjustment for risky current assets i.e Inventory
Acid test ratio = Current assets - Inventories / Current liabilities
Acid test ratio = ($187 million - $173 million) / $106 million
Acid test ratio = $14 million / $106 million
Acid test ratio = 0.13:1
Acid test ratio = 0.13 times
