The following information is
available for Company X:
Sales
$
60,000
Operating
expenses
$
57,000
Operating
assets
$
24,000
Stockholder's
equity
$
15,000
Cost of capital
8%
What is Company X's residual income? (Ignore Tax)
$1,200.
$1,800.
$1,080.
$1,920.
The following information is
available for Company X:
Sales
$
65,000
Operating
expenses
$
60,450
Operating
assets
$
35,000
Stockholder's
equity
$
16,250
Cost of capital
5.50%
What is Company X's return on investment (ROI)? (Ignore Tax)
5.50%.
7.00%.
28.00%.
13.00%.
The following information was presented by Delta Manufacturing
Company for an asset purchased the previous year.
Original cost of the
asset
$
90,000
Useful life of the
asset
10
Years
Annual operating
profit, including depreciation
$
23,400
Salvage value
$
-0-
What is the return on investment (ROI) assuming Delta (a) uses
the straight-line method for depreciation and (b) beginning-of-year
net book values to compute ROI? (Round your final answer to 2
decimal places.)
26.00%.
36.00%.
28.89%.
17.78%.