Instructions 1. Compute the margin and tumover ratios for each year 2. Compute the ROI for each year 3. Compute the residual income for each year 4. Compute EVA for Charles Corporation for each year (Note: Round to 2 decimal)
Instructions 1. Compute the margin and tumover ratios for each year 2. Compute the ROI for each year 3. Compute the residual income for each year 4. Compute EVA for Charles Corporation for each year (Note: Round to 2 decimal)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question

Transcribed Image Text:Below is given the data for the assembly division of Charles Corporation:
Sales
Cost of Sales
Operating Expenses
$10,000,000 $15,000,000
Average Operating Assets $250,000,000 $310,000,000
2020
2021
$100,000,000 $165,000,000
$22,000,000 $28,000,000
Minimum Required Rate of Return
Actual Cost of Capital
Income Tax Rate
Instructions
1. Compute the margin and turnover ratios for each year
2. Compute the ROI for each year
3. Compute the residual income for each year
4. Compute EVA for Charles Corporation for each year
(Note: Round to 2 decimal)
MacBook Air
9%
6%
30%
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