Capital B) concentrate on maximizing an absolute amount of dollars of residual income as opposed to a percentage yield as is the case with ROI C) maximize return on sales D) maximize the investment turnover ratio Times Corporation, whose tax rate is 30%, has two sources of funds: long-term debt with a market value of $6,500,000 and an interest rate of 7%, and equity capital with a market value of $18,000,000 and a cost of equity of 11%. Times Corporation's after-tax cost of debt is A) 11.00% B) 4.90% C) 9.38% D) 7.00% Tram incentives encourage cooperation by. mon goal Wheels Assembly Book Value Current value Book value Current value $485,000 $780,000 $600,000 $1,200,000 $140,000 $140,000 $165,000 $195,000) The company is currently using a 12% required rate of return. What are Wheels's and Assembly's residual incomes based on book values, respectively? A) $68,000; $51,000 B) $51,000; $68,000 $81,800; $71,400 D) $71,400; $81,800 Wheelde (12% X4185,-)-818 RT Assembly: 165. (12) X 7800001 = 18) A company which favors the residual income approach to financial performance evaluation wants managers to A) concentrate on maximizing a percentage return in excess of the cost of capital B) concentrate on maximizing an absolute amount of dollars of residual income as opposed to a percentage yield as is the case with ROI C) maximize return on sales D) maximize the investment turnover ratio 18 19) Times Corporation, whose tax rate is 30%, has two sources of funds: long-term debt with a market value of $6,500,000 and an interest rate of 7%, and equity capital with a market value of $18,000,000 and a cost of equity of 11%. Times Corporation's after-tax cost of debt is A) 11.00% B4.90% C) 9.38% D) 7.00% 20) Team incentives encourage cooperation by. letting individuals help one another as they strive toward a common goal B) enhancing the incentives of individual employees leading to overall positive performance C) rewarding all teams by the same margin D) identifying an efficient and a nonefficient employee