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Aloiza [94]
2 years ago
8

Assume an organization's cost of capital is 10% and Division X has operating income of $3 million and uses $20 million of capita

l. The economic value added for Division X is: a. $200,000. b. $300,000. c. $1,000,000. d. $1,700,000.
Business
1 answer:
Irina-Kira [14]2 years ago
8 0

Answer:

c. $1,000,000

Explanation:

The computation of the economic value added is shown below:

Economic value added = Operating income - total invested capital × WACC

                                      = $3,000,000 - $20,000,000 × 10%

                                      = $3,000,000 - $2,000,000

                                      = $1,000,000

We simply deduct the total invested capital by multiplying the cost of capital from the operating income

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To calculate marginal cost, divide the change in production costs by the change in quantity. The purpose of analyzing marginal cost is to determine at what point an organization can achieve economies of scale to optimize production and overall operations.

<h3>What is marginal cost?</h3>

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1 year ago
Which structure would you be most likely to choose if your company wanted to give its sales people a predictable paycheck and al
tangare [24]
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7 0
2 years ago
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Sql has built-in functions, which are also called ____________________ functions.​
Sever21 [200]

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3 years ago
Lester's just signed a contract that will provide the firm with annual cash inflows of $28,000, $35,000, and $42,000 over the ne
Free_Kalibri [48]

Answer:

$64,474.20

Explanation:

As for the information provided,

discount rate = 7.25%

First payment will be made at the end of year 1

Discounting factor = \frac{1}{(1+0.0725)^1} = 0.9324

Thus, current value of payment = 28,000 \times 0.9324 = $26,107.20

Discounting factor for receipts =

Year 1 = \frac{1}{(1+0.0725)^1} = 0.9324 = $28,000 \times 0.9324 = 26,107.20

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Therefore, value of contract today = - $26,107.20 + $26,107.20 + $30,429.0 + $34,045.20 = $64,474.20

5 0
3 years ago
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