Answer:
A.Incorrect
B. Incorrect
Explanation:
a) A manager might reject a proposal using ROI that the manager would accept using residual income
The statement is incorrect. The reverse is true. Using ROI entails the manager comparing the ROI after a project to the ROI before, where implementing a project makes the ROI after to be less than what it before the project, the Manager would most likely not implement the project. This would happen notwithstanding that the project produces positive residual income.
b) Managers will be more likely to pursue projects that will benefit the entire company when being evaluated on ROI instead of residual income.
This statement is incorrect. ROI makes the manager to pursue his own interest and that of its division at the expense of the group objectives. It leads to sub-optimal decision
Answer: $53.94
Explanation:
Current share price is the present value of the dividends for the next 3 years and the terminal value in year 3.
Terminal value = D₄ / ( required return - growth rate)
= (2.35 * 1.22³ * 1.05) / (12 % - 5%)
= $64
D₁ = 2.35 * 1.22 = $2.867
D₂ = 2.867 * 1.22 = $3.49774
D₃ = 3.49774 * 1.22 = $4.2672428
Share price = (2.867 / (1 + 12%)) + (3.49774 / 1.12²) + (4.2672428 / 1.12³) + (64/1.12³)
= $53.94
Answer: 1 widget per dollar
Explanation:
The weekly productivity level for this operation will be calculated thus:
Output = 8000 widgets per week.
Input = Labor Cost + Material Cost
= (5 × 40 × $15) + (100 × $50)
= $3000 + $5000
= $8000
Productivity = Output / Input
= $8000 / $8000
= 1 widget per dollar
Answer:
Internet Banks have lower overhead costs.
Explanation:
Online Banks and traditional banks are basically the same with the main difference being that Internet Banks have lower overhead costs. These are costs on the income statement usually including accounting fees, advertising, insurance, interest, legal fees, labor burden, rent, repairs, supplies, taxes, telephone bills, travel expenditures, and utilities. Since Internet Banks do not need many physical locations they save on many of these overhead fees.
Answer:
$6,530.15
Explanation:
Calculation:
First, converting R percent to r a decimal
r = R/100
= 7.1%/100 = 0.071 per year.
Putting time into years for simplicity,
9 months / 12 months/year = 0.75 years.
Solving our equation:
A = 6200(1 + (0.071 × 0.75)) = 6530.15
A = $6,530.15
The total amount accrued, principal plus interest, from simple interest on a principal of $6,200.00 at a rate of 7.1% per year for 0.75 years (9 months) is $6,530.15.
