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Isabelle Abiassi operates a popular summer camp for elementary school children. Projections for the current year are as follows: Sales revenue dollar 8,000,000 Operating income
Isabelle Abiassi operates a popular summer camp for elementary school children. Projections for the current year are as follows: Sales revenue dollar 8,000,000 Operating income dollar 700,000 Average assets dollar 4,000,000 The camp's weighted-average cost of capital is 10 percentage, and Isabelle requires that all new investments generate a return on investment of at least 14 percentage. The camp's current tax rate is 25 percentage. At last week's advisory board meeting, Isabelle told the board that she had up to dollar 50,000 to invest in new facilities at the camp and asked them to recommend some projects. Today the board's president presented Isabelle with the following list of three potential investments to improve the camp facilities. Calculate the return on investment, residual income, and economic value added for each of the three projects. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45). Round Economic Value Added answer to 2 decimal places, e.g. 15.25 & all other answers to 0 decimal places, e.g.15 or 15 percentage.)
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