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Strike441 [17]
2 years ago
5

Sunnyvale Inc. is considering investing in a new project. The average invested assets of the project would be $450,000 and the i

ncremental operating income would be $37,000. The company currently generates operating income of $220,000 and the invested assets are $2,005,000. The required rate of return (hurdle rate) is 5% on new projects.
Required:
a. What is the ROI before investing in the project?
b. What is the residual income before investing in the project?
c. What is the after investing in the project? (Round your answer to 2 decimal places.)
d. What is the residual income after investing in the project?
Business
1 answer:
hram777 [196]2 years ago
8 0

Answer:

Rate of Interest = Operating Income/Average Invested Asset

Residual Income = (Operating Income- Average Invested Assets)*Minimum Required rate of return

a. ROI before investing = $220,000/$2,005,000

ROI before investing = 0.109725686

ROI before investing = 10.97%

b. Residual Income = $220,000 - $2,005,000*5%

Residual Income = $220,000 - $100,250

Residual Income = $119,750

c. ROI after investing = ($220,000+$37,000) / ($2,005,000+$450,000)

ROI after investing = $257,000/$2,455,000

ROI after investing = 0.10468432

ROI after investing = 10.47%

d. Residual Income after investing = $220,000 + $37,000

Residual Income after investing = $257,000

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During the purchase phase for a new car, Larry creates a _____ that includes Chrysler 300 and Toyota Avalon, but does not includ
Novay_Z [31]

Answer:

Consideration chart.

Hope this helps!

8 0
3 years ago
Changes in stockholders' equity Listed are the equity sections of balance sheets for years 2014 and 2015 as reported by Mountain
svet-max [94.6K]

a. Mountain Air's net income for fiscal 2015 is $910,000.

b. The number of new shares issued is 1,120,000.

c. The price per share of the new stock sold during 2015 is $4.20.

d. The original price of the shares was $2.08.

a. The net income is

= $1,500,000 - $800,000 + $210,000

= $910,000

b. The number of  New Share issued is

= 1,600,000 - 480,000

= 1,120,000

c. The price of the new stock per share sold is  

Par Value 1,120,000

Add: Paid In excess Of par (4,100,000 - 520,000) 3,580,000

Net Proceeds from issuance of shares 4,700,000

Number of New Share Issued 1,120,000

Now  

The Average price per share of the new stock sold is

= 4,700,000 ÷ 1,120,000

= $4.20

d. The original price of the share is  

The original issuance price is

= (Paid-in-capital account + common stock account) ÷ original shares  

= (520,000 + 480,000) ÷ 480,000

= $2.08

Therefore we can conclude that

a. Mountain Air's net income for fiscal 2015 is $910,000.

b. The number of new shares issued is 1,120,000.

c. The price per share of the new stock sold during 2015 is $4.20.

d. The original price of the shares was $2.08.

Learn more: brainly.com/question/13931207

5 0
2 years ago
A machine with a cost of $164,000, accumulated depreciation of $102,000, and current year depreciation expense of $25,500 is sol
Gre4nikov [31]

Answer:

$53,600

Explanation:

The computation of the cash flow from investing activities is shown below:

Cash flow from investing activities

Sale value of machinery $53,600

Net cash flow from investing activities $53,600

The current year depreciation expense is to be reported under operating activities and as we know that the investing activities record those activities which are held for purchased and sale of long term assets so the sale value fo machinery is only reported

4 0
3 years ago
Last year, Bad Tattoo Co. had additions to retained earnings of $4,780 on sales of $95,560. The company had costs of $75,720, di
fredd [130]

Answer:

e. $6,042

Explanation:

Net income of Bad tattoo co. = Addition of retained earnings + Dividends

= $4,780 + $2,980

= $7,760

Income before tax of Bad tattoo Co = Net income / (1-tax rate)

= $7,760 / (1-34%)

= $7,760 / 0.66

= $11,758

But,

Income before tax = Sales - Costs

- Depreciation expense - Interest expense

$11,758 = $95,560 - $75,720 - Depreciation expense - $2,040

$11,758 = $19,840 - Depreciation expense - $2,040

Depreciation expense = $19,840 - $11,758 - $2,040

Depreciation expense = $6,042

8 0
3 years ago
An operational plan provides a detailed road map of the steps necessary to achieve operational goals (sometimes referred to as o
lesya692 [45]

Answer: single use plan

Explanation: In simple words,single use plan refers to the plan that is made for achieving a goal that will not repeat in future.

A program plan refers to the plan that an organisation makes with an objective of outlining the activities and events that the employees have to follow for achieving organisational goals.  

Hence, from the above we can conclude that a program is a single use plan as it outlines activities for a specific project that needs to be performed.  

4 0
3 years ago
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