Required rate of return is 12% a year. Sales revenue is $2,000. Investment (operatiassets) is $4,000. Profit is $160. Compute the residual income (RI).O $480O (8%)O 4%O ($320)O ($80)Question 4

Residual income is the amount of extra earnings that an entity has, after paying of all the…

Answered: Required rate of return is 12% a year.…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Using the following data, estimate the new Return on Investment if there is a 9% decrease in the average operating assets - with the new average operating assets as the base. Sales $2,217,038 Contribution margin Controllable foxxed costs Average operating assets 34% 283,398 $4,189,521 Round to two decimal places. Be sure to enter the answer as a percentage but do not include the % sign.
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calculate all the missing values a, b, c, d, e, f, g, and h. Madison Corp. has a hurdle rate/required rate of return of 9%. Operating Average income (c) Total assets $115,000 $800,000 (a) (f) $175,000 (e) Return on Residual investment income (ROI) $1,350,000 17% $46,800 (h) $750,000 (g) 13% (RI) (b) (d) $31,000 $36,000 ?

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Required rate of return is 12% a year. Sales revenue is $2,000. Investment (operat assets) is $4,000. Profit is $160. Compute the residual income (RI). O $480 O (8%) 4% O ($320) O ($80)