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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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7 0
3 years ago
Many adults owe money from their college loans for years into their professional careers. a newspaper would like to estimate the
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7 0
2 years ago
Stone Foods produces the majority of its cheese products in its U.S. based dairy division at a total outlay cost of $6.00 per un
lubasha [3.4K]

Answer:

Stone Foods produces the majority of its cheese products in its U.S. based dairy division at a total outlay cost of $6.00 per unit. A large portion of the finished product is sold to Division B where it is packaged and sold overseas under a different label. The tax rate in Division B's country is higher than the U.S. tax rate. Assume the company desires to minimize the overall tax impact of the transfer (i) what type of relative pre-tax income should each division desire to achieve as a result of the transfer and (ii) what type of transfer price would accomplish your answer to (i).  

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Option  "D"  is the correct answer -  High Low High.

Explanation:

Since in Division B, the tax rate is higher than the tax rate in US-based dairy division. Therefore to minimize the impact of the overall tax, transfer price from dairy division should be high to Division B so that the dairy division income would be higher. and the income of Division B would be lower.

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4 years ago
Which is the primary source of revenue for the federal government
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