RD
rajesh dasari
Answers (2)
RD
Answered
According to some studies,how soon is the decision on whether or not to pursue a candidate made?
A) Within 1 hour of contact with the candidate
B) Within 45 minutes of contact with the candidate
C) Within 20 minutes of contact with the candidate
D) Within 5 minutes of contact with the candidate
E) Within 20 seconds of contact with the candidate
A) Within 1 hour of contact with the candidate
B) Within 45 minutes of contact with the candidate
C) Within 20 minutes of contact with the candidate
D) Within 5 minutes of contact with the candidate
E) Within 20 seconds of contact with the candidate
On Sep 26, 2024
E
RD
Answered
The Clipper Corporation had net operating income of $380,000 and average operating assets of $2,000,000.The corporation requires a return on investment of 18%.
Required:
a.Calculate the company's return on investment (ROI)and residual income (RI).
b.Clipper Corporation is considering an investment of $70,000 in a project that will generate annual net operating income of $12,950.Would it be in the best interests of the company to make this investment?
c.Clipper Corporation is considering an investment of $70,000 in a project that will generate annual net operating income of $12,950.If the division planning to make the investment currently has a return on investment of 20% and its manager is evaluated based on the division's ROI, will the division manager be inclined to request funds to make this investment?
d.Clipper Corporation is considering an investment of $70,000 in a project that will generate annual net operating income of $12,950.If the division planning to make the investment currently has a residual income of $50,000 and its manager is evaluated based on the division's residual income, will the division manager be inclined to request funds to make this investment?
Required:
a.Calculate the company's return on investment (ROI)and residual income (RI).
b.Clipper Corporation is considering an investment of $70,000 in a project that will generate annual net operating income of $12,950.Would it be in the best interests of the company to make this investment?
c.Clipper Corporation is considering an investment of $70,000 in a project that will generate annual net operating income of $12,950.If the division planning to make the investment currently has a return on investment of 20% and its manager is evaluated based on the division's ROI, will the division manager be inclined to request funds to make this investment?
d.Clipper Corporation is considering an investment of $70,000 in a project that will generate annual net operating income of $12,950.If the division planning to make the investment currently has a residual income of $50,000 and its manager is evaluated based on the division's residual income, will the division manager be inclined to request funds to make this investment?
On Sep 23, 2024
a.Return on investment = Net operating income ÷ Average operating assets = $380,000 ÷ $2,000,000 = 19%
Residual income = Net operating income - (Average operating assets × Minimum required rate of return)= $380,000 - ($2,000,000 × 0.18)= $20,000
b.Return on investment = Net operating income ÷ Average operating assets = $12,950 ÷ $70,000 = 18.5%.Because the return on investment of the project exceeds the company's minimum required rate of return, the project should be accepted.It would increase both the company's residual income and its return on investment.
c.The manager of the division would not be inclined to request funds to make the investment in the new project because its return on investment is only 18.5%, which is less than the division's current return on investment of 20%.The new project would drag down the division's return on investment.
d.The manager of the division would be inclined to request funds for the new project.The project's return on investment of 18.5% exceeds the minimum required rate of return of 18%, which would result in an increase in residual income if the project were accepted.
Residual income = Net operating income - (Average operating assets × Minimum required rate of return)= $380,000 - ($2,000,000 × 0.18)= $20,000
b.Return on investment = Net operating income ÷ Average operating assets = $12,950 ÷ $70,000 = 18.5%.Because the return on investment of the project exceeds the company's minimum required rate of return, the project should be accepted.It would increase both the company's residual income and its return on investment.
c.The manager of the division would not be inclined to request funds to make the investment in the new project because its return on investment is only 18.5%, which is less than the division's current return on investment of 20%.The new project would drag down the division's return on investment.
d.The manager of the division would be inclined to request funds for the new project.The project's return on investment of 18.5% exceeds the minimum required rate of return of 18%, which would result in an increase in residual income if the project were accepted.