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These are the correct answers; no idea how to get them. Question 14 2 pts Larsen Corporations reported R&D expense, reported net income before and
These are the correct answers; no idea how to get them.
Question 14 2 pts Larsen Corporations reported R&D expense, reported net income before and after R&D expense, and reported net operating assets for the years 2010 through 2015 are as follows (all figures are in S). All the figures reported in the table below are per GAAP 2010 2011 2012 2013 2014 2015 Net Income Before Expense 270 275 Expense 120 Net Income After Expense 210 Net Operating Assets at the End Of the Year 1,020 1,040 1,050 1,060 1,080 1,100 Larsen currently uses Residual Income to measure performance. Assume that the R&D expenditures (shown above) were made at the beginning of the respective years and that R&D has a useful life of 4 years. Larsens cost of capital is 12% per year. Assume that the Residual Income capital charges are based on the invested capital at the end of the year. Assume that Larsen does not have any liabilities (i.e., all assets are financed with equity). Ignore the effect of taxes. Calculate Larsen's ROI for 2015 (rounded to the nearest 7% Calculate Larsen's Residual Income for 2015 (rounded to the nearest dollar). ($57)
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