Data for Uberto Company are presented in the following table of rates of return
ID: 2431731 • Letter: D
Question
Data for Uberto Company are presented in the following table of rates of return on investment and residual incomes: Invested Assets Income from Operations Rate of Return on Investment Minimum Rate of Return Minimum Acceptable Income from Operations Residual Income $860,000 $215,000 (a) 14% (b) (c) $610,000 (d) (e) (f) $67,100 $30,500 $380,000 (g) 14% (h) $41,800 (i) $290,000 $60,900 (j) 13% (k) (l) Determine the missing values, identifying each item by the appropriate letter. a. % b. $ c. $ d. $ e. % f. % g. $ h. % i. $ j. % k. $ l. $
Explanation / Answer
Answers
Invested Asset
Income from Operations
ROR on Investment
Minimum ROR
Minimum Acceptable Income from Operations
Residual Income
[A]
[B]
[C = (B/A) x 100]
[D]
[E = A x D]
[F = B - E]
$ 860,000.00
$ 215,000.00
25.00%
14.00%
$ 120,400.00
$ 94,600.00
$ 610,000.00
$ 97,600.00
16.00%
11.00%
$ 67,100.00
$ 30,500.00
$ 380,000.00
$ 53,200.00
14.00%
11.00%
$ 41,800.00
$ 11,400.00
$ 290,000.00
$ 60,900.00
21.00%
13.00%
$ 37,700.00
$ 23,200.00
Invested Asset
Income from Operations
ROR on Investment
Minimum ROR
Minimum Acceptable Income from Operations
Residual Income
[A]
[B]
[C = (B/A) x 100]
[D]
[E = A x D]
[F = B - E]
860000
215000
=215000/860000
0.14
=860000*14%
=215000-120400
610000
=67100+30500
=97600/610000
=67100/610000
67100
30500
380000
=380000*14%
0.14
=41800/380000
41800
=53200-41800
290000
60900
=60900/290000
0.13
=290000*0.13
=60900-37700
Invested Asset
Income from Operations
ROR on Investment
Minimum ROR
Minimum Acceptable Income from Operations
Residual Income
[A]
[B]
[C = (B/A) x 100]
[D]
[E = A x D]
[F = B - E]
$ 860,000.00
$ 215,000.00
25.00%
14.00%
$ 120,400.00
$ 94,600.00
$ 610,000.00
$ 97,600.00
16.00%
11.00%
$ 67,100.00
$ 30,500.00
$ 380,000.00
$ 53,200.00
14.00%
11.00%
$ 41,800.00
$ 11,400.00
$ 290,000.00
$ 60,900.00
21.00%
13.00%
$ 37,700.00
$ 23,200.00
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