Solution-Calculate residual income for katherine department

Calculate residual income for katherine department

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Reference no: EM132706533

For fiscal year 2018, Katherine's Department Store had net income of $6,000,000. Interest expense was $2,250,000, and the company's tax rate on income was 40 percent. Total assets were $80,000,000, and noninterest-bearing current liabilities were $6,700,000. The company's cost of capital (required rate of return) is 10 percent.

Problem 1: Calculate NOPAT, invested capital, and residual income for Katherine's Department Store. (Enter negative answers preceding either - sign, e.g. -45 or in parentheses, e.g. (45).)

Reference no: EM132706533

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Calculate residual income for katherine department

Reference no: EM132706533

Reference no: EM132706533

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