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Doortune Company makes doorbells. It has a weighted average cost of capital of 9%, and total assets of $5,800.000. Dortune has cument abilities of
Doortune Company makes doorbells. It has a weighted average cost of capital of 9%, and total assets of $5,800.000. Dortune has cument abilities of $950,000 th operating income for the year was $620.000 Doontune does not have to pay any income taxes. One of the expenses for accounting purposes was a $120,000 advertising campaign nun in early January The entire amount was deducted this year, although the Doontune CED believes the beneficial effects of this advertising will last 4 years Read the uitments Requirement 1. Calculate residual income, assuming Doortune define Begin by determining the formula, then enter the amounts and calcula Requirements 1. Calculate residual income, assuming Doortune defines investment as total 2. Calculate EVA for the year Adjust both the year end assets and operating income for advertising assuming that for the purposes of comic value added the advertising is capitalized and amortized on a stray bassover 3. Discuss the ofference between the outcomes of requirements 1 and 2. Which Print Done
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