Answer:
ROI 87.5%
Explanation:
Return on Investment = return /investment
Total return
50,000 perating income + 20,000 residual income = 70,000 income
The asset could been adquire on lease or through liabilities, this is not investment. The investmetn made is the one done by the shareholders.
Stock Holders equity = investment = 80,000
The shareholders invest this amount to generate
70,000 dollars of return
ROI 70,000/80,000 = 87.5%
Answer:
Explanation:
If a company(Marriott in this case) uses a single hurdle rate to decide whether an investment should be undertaken or not, some projects that need to be accepted would end up being rejected and vice versa. For example,
if Marriott's hurdle rate is 10% and it's evaluating
project A with a 15% cost of capital &
project B with a 6% cost of capital .
Evaluation:
Project A would probably lead to a negative NPV because the cost of capital is higher (meaning it is riskier than the firm) hence could be rejected, but using the company hurdle rate of 10% to evaluate it could make its NPV positive. This would ignore the actual additional risk of the project.
Answer:
- Behavioural Substitution
Explanation:
Martianse human resources department uses and deploy the concept of Behavioural Substitution.
To begin, Martianse goal, as a firm, is to motivate the employees to perform better. Hence, the human resources department has come up with measures to achieve that. It is thus believed that replacing the fixed incentive system hitherto known with the firm, should be replaced by a performance based system. By this, the firm believes its primary goal will be accelerated.
Behavioural Substitution is thus the concept that the human resources department has displayed in their analysis and engagement. For one, behavioural substitution is simply the procedures aimed at replacing and/or supplanting efforts and actions that does not lead to goal accomplishments. By general belief, the old style of reward system used by Martianse has been seen as one not leading to goal actualization. Hence, it is important to substitute this non productive reward system with one established to elicit more better and improved performance from the workforce.
Answer:
$12,000
Explanation:
The main difference between cash basis accounting and accrual accounting is that accrual accounting recognizes revenue only after the earning process is completed. On the other hand, cash basis accounting recognizes revenue and expenses when the money is received or paid, regardless of when the service is provided. This is why the US GAAP doesn't allow cash basis accounting.
The IRS allows cash basis accounting for individuals and small businesses that only deal with cash payments, but they must meet certain criteria:
- partnerships or C corporations with less than $5 million in yearly revenue
- sole proprietorships and S corporations with less than $1 million in yearly revenues
- family owned farms
- you provide personal services and 95% of your revenue comes from it
- no publicly traded corporation is allowed
