Question
Question 1: XYZ, Inc. has an operating income of $812,048 and net assets of $3,845,199. XYZ's minimum rate of return is 19%. XYZ has the
Question 1:
XYZ, Inc. has an operating income of $812,048 and net assets of $3,845,199. XYZ's minimum rate of return is 19%. XYZ has the opportunity to increase operating income by $243,614 by making an investment of $769,040 in new assets. These assets will be in operation together with those already in place.
REQUIRED: Calculate XYZ's residual income if the project is carried out. (Do not use decimals).
Answer:
Question 2:
XYZ, Inc. has an operating income of $753,140 and net assets of $3,941,032. XYZ's minimum rate of return is 16%. XYZ has the opportunity to increase operating income by $225,942 by making an investment of $788,206 in new assets. These assets will be in operation together with those already in place.
REQUIRED: Calculate the return on investment (ROI) of XYZ if the project is carried out. (Round your answer to two decimal places.)
Answer:
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Auditing A Risk Analysis Approach
Authors: Larry F. Konrath
5th Edition
032405789X, 9780324057898
