Answer:
(a) Compute the return on investment (ROI) for the current year.
Current ROI 8.72%
Explanation:
Sales 3,018,000
- Variable Cost 1,979,808
- fixed cost 594,600
Operating Income 443,592
Operating assets 5,087,200
Return on Investment

ROI = 433,592/5,087,200 = 0.087197 = 8.72%
Answer:
$80,000
Explanation:
Calculation to determine the amount of differential revenue
Using this formula
Differential revenue=Per units*Number of units
Let plug in the formula
Differential revenue=$400 x 200 units
Differential revenue= $80,000
Therefore the amount of differential revenue is $80,000
Answer:
b) $11,000 gain realized; $10,000 recognized.
Explanation:
Gain realized = $16,000 + $10,000 + $5,000 - $20,000 = $11,000
However, the transaction qualifies under sec.351 for non recognition. Transfer of Mortgaged property to a controlled corporation does not require recognition of gain unless the liabilities transferred or assumed are greater than the basis of all the property transferred. So the recognized gain is attributable to the $10,000 cash received.
Answer:
The bond worth as at today is $6,335.
Explanation:
Annuity factor @ 5.5% at year 8 = (1-(1+5.5%)^-8)/.055= 6.335
Hence, Present Value of $1000 payable in eight year time = 6.335* $1000
= $6,335
Hence, the bond value as at today is $6,335.
This calculation is done assuming there is no redemption value.
Answer:
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