Question
Beta Inc has the following data for last years operations: Sales................................ $100,000 Net Operating Income........ $6,000 Average Operating Assets... $40,000 Stockholders Equity............... $25,000 Minimum Required
Beta Inc has the following data for last years operations:
Sales................................ $100,000
Net Operating Income........ $6,000
Average Operating Assets... $40,000
Stockholders Equity............... $25,000
Minimum Required rate of return. 10%
a) Compute Residual Income
b) Compute return of investment
Alpha Corp reported operating data as follows for the past year:
Sales..................$600,000
Net Operating Income....$30,000
Average Operating Assets....$200,000
Stakeholders Equity.................. $50,000
Residual Income........................ $14,000
a) Calculate Alpha's Minimum Rate of Return
b)Alpha's Margin
c) Alpha's turnover
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