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The Truman Division of Wordsworth, Inc. reported the following results. Sales 40,000,000 Expenses 30,000,000 Average Assets 80,000,000 Compute the following: 1) Margin 2) Turnover 3)
The Truman Division of Wordsworth, Inc. reported the following results. | ||||||
Sales | 40,000,000 | |||||
Expenses | 30,000,000 | |||||
Average Assets | 80,000,000 | |||||
Compute the following: | ||||||
1) | Margin | |||||
2) | Turnover | |||||
3) | ROI | |||||
Truman's management requires a minimum acceptable rate of return of: | 10% | |||||
4) | Calculate the residual income for the Truman Division. | |||||
Wordsworth evaluates its divisions based on economic value added. | ||||||
Wordsworth's tax rate is: | 22.50% | |||||
Wordsworth's cost of capital is: | 8.25% | |||||
5) | Calculate the EVA for the Truman Division. |
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