The northern division of Aussie Estates has reported a profit of $4 million. Divisional invested capital is $2.5 million and the imputed interest rate is 12 per cent. What is the residual income? a.$3.70 million b.$3.52 million c.$1.50 million d.$2.02 million
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- Division A of Kern Co. has sales of $350,000, cost of goods sold of $200,000, operating expenses of $30,000, and invested assets of $600000. What is the return on investment for Division A? A. 20% B. 25% C. 33% D. 40%Talbot Enterprises recently reported an EBITDA of $8 million and net income of $2.4 million. It had $2.0 million of interest expense, and its corporate tax rate was 40%. What was its charge for depreciation and amortization?The Berndt Corporation expects to have sales of 12 million. Costs other than depreciation are expected to be 75% of sales, and depreciation is expected to be 1.5 million. All sales revenues will be collected in cash, and costs other than depreciation must be paid for during the year. Berndts federal-plus-state tax rate is 40%. Berndt has no debt. a. Set up an income statement. What is Berndts expected net income? Its expected net cash flow? b. Suppose Congress changed the tax laws so that Berndts depreciation expenses doubled. No changes in operations occurred. What would happen to reported profit and to net cash flow? c. Now suppose that Congress changed the tax laws such that, instead of doubling Berndts depreciation, it was reduced by 50%. How would profit and net cash flow be affected? d. If this were your company, would you prefer Congress to cause your depreciation expense to be doubled or halved? Why?
- Blaser Corporation had $1,017,000 in invested assets, sales of $1,284,000, operating income amounting to $220,000 , and a desired minimum return on investment of 15%. The return on investment for Blaser Corporation is Round the percentage to one decimal place. a.17.1% b.13.7% c.26.0% d.21.6%Local Co. has sales of $10.9 million and cost of sales of $6.1 million. Its selling, general andadministrative expenses are $550,000 and its research and development is $1.1 million. It has annualdepreciation charges of $1.5 million and a tax rate of 25%. What is Local's net profit margin?if requires a minimum return on its investments of 15%, what is their residual income? NUBD Co has the following information available for one of its divisions: Average operating assets P5,000,000 Return on investment Sales 40% P8,000,000
- Spartans Inc. has the following information for its two divisions: North and South North South Sales $6,000,000 $6,000,000 Expenses $3,800,000 $3,800,000 Oper. Income $2,200,000 $2,200,000 Taxes $660,000 $770,000 Taxable Inc. $1,540,000 $1,430,000 Invested Assets $13,000,000 $15,000,000 Spartans Inc. has a 10% hurdle rate. Calculate the following for each division: Return on Investment (ROI) North Division ________________ South…Data for the wholesale products division of ABC Co. are as follows: Earnings before interest and taxes P30,000,000; Depreciation expense P10,000,000; Interest Expense P1,000,000; Change in net working capital P5,000,000; Capital expenditures P4,000,000; Invested capital P50,000,000; Weighted average cost of capital 10%; Tax rate 30%. Considering the impact of income tax, the economic value added by the division must be nearest to P15,300,000 P16,000,000 P16,300,000 P25,000,000 P30,000,000Local Co. has sales of $10.9 million and cost of sales of $5.9 million. Its selling, general and administrative expenses are $500,000 and its research and development is $1.4 million. It has annual depreciation charges of $1.4 million and a tax rate of 25%. a. What is Local's gross margin? b. What is Local's operating margin? c. What is Local's net profit margin? a. What is Local's gross margin? Local's gross margin is _____%.
- Shane Co. has sales of $11.5 million and cost of sales of $5.6 million. Its selling, generaland administrative expenses are $550,000 and its research and development is $1.3million. It has annual depreciation charges of $1.4 million and a tax rate of 35%. a. What is Local's gross margin? (answer in %, Round to one decimal place.)ABC Ltd has a 10 percent return on total assets of sh.1000,000 and a net profit margin of 5 percent. What are its sales? Select one: A. sh. 50,000 B. sh. 100,000 C. sh. 2,000,000 D. None of the aboveLocal Co. has sales of $10.7 million and cost of sales of $6.4 million. Its selling, general and administrative expenses are $450,000 and its research and development is $1.4 million. It has annual depreciation charges of $1.2 million and a tax rate of 25%. a. What is Local's gross margin? b. What is Local's operating margin? c. What is Local's net profit margin? d. If Local Co. had an increase in selling expenses of $330,000, how would that affect each of its margins? e. If Local Co.had interest expense of $770,000, how would that affect each of its margins? a. What is Local's gross margin? Local's gross margin is enter your response here %. (Round to one decimal place.) Part 3 b. What is Local's operating margin? Local's operating margin is enter your response here %. (Round to one decimal place.) Part 5 c. What is Local's net profit margin? Part 6 Local's net profit margin is enter your response here %. (Round to two decimal places.) d. If Local Co. had an increase in…
