Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Scott Johnson was trying to evaluate the return on his cooperative equity investment. Scott has $ 1 2 0 , 0 0 0 invested in

image text in transcribed
Scott Johnson was trying to evaluate the return on his cooperative equity investment. Scott has $120,000 invested in his cooperative. Last year, he received $2,000 dividends on this investment and a $12,000 patronage refund. He also figured that he got $1,500 more for his crops by selling through the cooperative than through other marketing alternatives available to him. He could also buy some minor input supplies at wholesale prices from the cooperative, and he figured that saved him $1,000. Finally, Scott believed that commodity prices might fall if the cooperative was not present in the marketplace. He might easily lose $3,000 in farm revenue if such a thing happened.
Match Scott's total cooperative equity investment, sum of all returns from his cooperative, and total realized return on his cooperative equity to the provided numbers below.
Total cooperative equity investment
A.120,000D. Yes
Realized return on cooperative equity
E.13,500(percentage)
F. No
If Scott could realize a 15% return by
G.11.25% dealing with a noncooperative and reinvesting his $120,000 elsewhere, should he continue being a cooperative member? (Answer: Yes or No)
image text in transcribed

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Fundamentals of Financial Accounting

Authors: Fred Phillips, Robert Libby, Patricia Libby

5th edition

78025915, 978-1259115400, 1259115402, 978-0078025914

Students also viewed these Accounting questions