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hoa [83]
3 years ago
12

Falconer Company had net (after-tax) income last year of $14,107,956 and total capital employed of $131,869,720. Falconer's actu

al cost of capital was 12%.
Required:
1. Calculate the EVA for Falconer Company. Enter negative values as negative numbers, if required. Round your answer to the nearest dollar. $
2. Conceptual Connection: Is Falconer creating or destroying wealth?
Business
1 answer:
Vikki [24]3 years ago
8 0

Answer:

1. -$1,716,410.40

2. destroying wealth

Explanation:

The formula to compute EVA is shown below:

1. = Net operating income or earnings after taxes - (total capital employed × actual cost of capital)

= $14,107,956 - ($131,869,720 × 12%)

= $14,107,956 - $15,824,366.40

= -$1,716,410.40

2. As we see that the amount comes in negative that represent the wealth is destroyed

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Optimus Company manufactures a variety of tools and industrial equipment. The company operates through three divisions. Each div
PIT_PIT [208]

Answer:

OPTIMUS COMPANY

Home Division Responsibility Report For the Year Ended December 31, 2020

The report is attached in form of a variance report with comments.  Where the variance is not indicated, it means that it was neither favorable nor unfavorable.

Explanation:

A responsibility report is usually presented by a division that is an investment center.  An investment center has responsibility for return on investments.

The investment center takes charge of the cost, revenue, profit, and investments of the division.  It is expected to produce returns on its investment that will be favorable to the shareholders of the company.  It is directly responsible for profitability of the division vis-a-vis the capital investments made in the center.  It is unlike other divisions like cost center, revenue center, and profit center, which narrowly report their performances in accordance with their responsibilities.

This is why it does not only report on the cost, but also the revenue, the profit and the returns on investment achieved during a period.  An investment center is, therefore, the largest division of an entity.

Download xlsx
3 0
3 years ago
Porter’s competitive strategies of cost leadership and differentiation focus on ____ markets, while the cost-focus and focused-d
Artyom0805 [142]

Answer:

WIDE

NARROW

Porter’s competitive strategies of cost leadership and differentiation focus on WIDE markets, while the cost-focus and focused-differentiation strategies focus on NARROW markets.

Explanation:

Porter’s competitive strategies of cost leadership and differentiation focus on WIDE markets, while the cost-focus and focused-differentiation strategies focus on NARROW markets.

Differentiation refers to a firm's ability to create a good or service that is distinct from other product. This strategy leads to having or creating brand image, which allows the organization to sell its products or services at a premium

Cost leadership relates to a firm's ability to create economies of scale by producing a large volume of goods or service.

6 0
3 years ago
The fundamental relationship between savings and investment spending in an economy is that: A. savings will increase as investme
Romashka-Z-Leto [24]

The correct option is B

<u>Explanation:</u>

In an economy, planned investment spending is always equal to planned saving. If actual saving falls short of (exceeds) planned saving, then actual investment falls short of (exceeds) planned investment.

That is the other part of the saving paradox. If an economy produces too much, such that saving is greater than planned investment, inventory will build up, giving signal to producers to reduce output, to restore equilibrium. Such investment scheme is suitable only to communist countries. Keynes has another investment theory in his liquidity story. But investment theories are equally a posterior.

Therefore, Option B is correct

8 0
3 years ago
Hanif specializes in senior photographs. He knows that during the spring before high school graduation he can charge more for an
yanalaym [24]

Hanif will supply less tutoring now, shifting supply to the left as he is expecting this price increase in the future.

<h3>What is a supply curve?</h3>

A supply curve, in economics, is a graphic illustration of the connection between product charges and the quantity of product that a vendor is inclined and able to supply.

Product price is measured on the vertical axis of the graph and the number of products provided on the horizontal axis.

Therefore, Hanif will supply less tutoring now, shifting supply to the left as he is expecting this price increase in the future.

learn more about supply curve here:

brainly.com/question/516635

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8 0
2 years ago
What is the Best loan option for your<br> lemonade Stand? Why?
Arte-miy333 [17]

Answer:

Short term loan

Explanation:

Lemonade stand can be regarded as a small business, Hence, the loan that suit the business is " Short term loan".

Short term loan can be regarded as loan that can be obtained to give support to ones personal as well as business capital. It is designed for the needs of small business capital with less interest compare to long term loan. The period of payment is usually within a year. It is of low risk and good profit.

4 0
2 years ago
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