Jackie Chin Waste Management has a subsidiary that disposes of hazardous waste a
ID: 2378972 • Letter: J
Question
Jackie Chin Waste Management has a subsidiary that disposes of hazardous waste and a subsidiary that collects and disposes of residential garbage. Information related to the two subsidiaries follows:Hazardous Residential Waste Waste Total assets $12,000,000 $72,000,000 Noninterest-bearing current liabilities 3,000,000 12,000,000 Net income 1,700,000 6,000,000 Interest expense 1,250,000 2,300,000 Required rate of return 8% 10% Tax rate 35% 40%
Based on the limited information, which subsidiary is the best candidate for expansion? Answer A. Hazardous waste, because it has a higher residual income. B. Hazardous waste, because it has a higher return on investment C. Residential waste, because it has a higher residual income. D. Residential waste, because it has a higher return on investment Jackie Chin Waste Management has a subsidiary that disposes of hazardous waste and a subsidiary that collects and disposes of residential garbage. Information related to the two subsidiaries follows:
Hazardous Residential Waste Waste Total assets $12,000,000 $72,000,000 Noninterest-bearing current liabilities 3,000,000 12,000,000 Net income 1,700,000 6,000,000 Interest expense 1,250,000 2,300,000 Required rate of return 8% 10% Tax rate 35% 40%
Based on the limited information, which subsidiary is the best candidate for expansion? Jackie Chin Waste Management has a subsidiary that disposes of hazardous waste and a subsidiary that collects and disposes of residential garbage. Information related to the two subsidiaries follows:
Hazardous Residential Waste Waste Total assets $12,000,000 $72,000,000 Noninterest-bearing current liabilities 3,000,000 12,000,000 Net income 1,700,000 6,000,000 Interest expense 1,250,000 2,300,000 Required rate of return 8% 10% Tax rate 35% 40%
Based on the limited information, which subsidiary is the best candidate for expansion? Hazardous Residential Waste Waste Total assets $12,000,000 $72,000,000 Noninterest-bearing current liabilities 3,000,000 12,000,000 Net income 1,700,000 6,000,000 Interest expense 1,250,000 2,300,000 Required rate of return 8% 10% Tax rate 35% 40%
Based on the limited information, which subsidiary is the best candidate for expansion? Hazardous waste, because it has a higher residual income. Hazardous waste, because it has a higher return on investment Residential waste, because it has a higher residual income. Residential waste, because it has a higher return on investment Hazardous Residential Waste Waste
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