2. Conroy Media is a fitness platform, with more than 1 million subscribers on its platform. The company reported an operating loss of $25 million in the most recent year, but that was after expensing $36 million spent on acquiring subscribers during the year. Assume that a subscriber stays on the platform for three years, and that you have the subscriber acquisition costs for the most recent years below: Year Current -1 -2 -3 Subscriber acquisition cost (in millions USD) $36 $27 $21 $14 Estimate the corrected pre-tax operating income for this company, with subscriber acquisitions being treated as the equivalent of capital expenditures.

2. Conroy Media is a fitness platform, with more than 1 million subscribers on its platform. The company reported an operating loss of $25 million in the most recent year, but that was after expensing $36 million spent on acquiring subscribers during the year. Assume that a subscriber stays on the platform for three years, and that you have the subscriber acquisition costs for the most recent years below: Year Current -1 -2 -3 Subscriber acquisition cost (in millions USD) $36 $27 $21 $14 Estimate the corrected pre-tax operating income for this company, with subscriber acquisitions being treated as the equivalent of capital expenditures.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter14: Corporation Accounting

Section: Chapter Questions

Problem 18EA: Roxannes Delightful Candies, Inc. began the year with a retained earnings balance of $45,000. The...

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Kyzera manufactures, markets, and sells cellular telephones. The average total assets for Kyzera is$250,000. In its most recent year, Kyzera reported net income of $65,000 on revenues of $475,000. Required What is Kyzera’s return on assets?
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Kyzera manufactures, markets, and sells cellular telephones. The average total assets for Kyzera is$250,000. In its most recent year, Kyzera reported net income of $65,000 on revenues of $475,000. Required What are total expenses for Kyzera in its most recent year?
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Doorchime Company makes doorbells. It has a weighted-average cost of capital of 6% and total assets of $5,690,000. Doorchime has current liabilities of $550,000. Its operating income for the year was $630,000. Doorchime does not have to pay any income taxes. One of the expenses for accounting purposes was a $70,000 advertising campaign run in early January. The entire amount was deducted this year, although the Doorchime CEO believes the beneficial effects of this advertising will last 4 years. Q. Calculate residual income, assuming Doorchime defines investment as total assets.
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