User Account

All Pages

Calculate the roi for tellco

Assignment Help Managerial Accounting
Reference no: EM132835794

Early in January 2019, Tellco Inc. acquired a new machine and incurred $12,000 of interest, installation, and overhead costs that should have been capitalized but were expensed. The company earned net operating income of $85,000 on average total assets of $795,000 for 2019. Assume that the total cost of the new machine will be depreciated over 10 years using the straight-line method.

Required:

Problem 1: Calculate the ROI for Tellco for 2019.

Problem 2: Calculate the ROI for Tellco for 2019, assuming that the $12,000 had been capitalized and depreciated over 10 years using the straight-line method. (Hint: There is an effect on net operating income and average assets.)

Problem 3: Given your answers to parts a and b, why would the company want to account for this expenditure as an expense?

Problem 4: Assuming that the $12,000 is capitalized, what will be the effect on ROI for 2020 and subsequent years, compared to expensing the interest, installation, and overhead costs in 2019?

Reference no: EM132835794

Questions Cloud

Create a training program for adult education facilitators : You have been asked to create a training program for adult education facilitators or corporate trainers who have no previous experience in distance education.
Challenges in designing a pay for performance program : Define the challenges in designing a Pay for Performance (P4P) program.
How can the discussion of hardware and software help : How can the discussion of hardware and software help you in deciding in which computer and/or gadget to buy (smartphone and tablet). What are your reasons?
What leadership behaviors support continuous improvement : What leadership behaviors support continuous improvement? What are some models and best practices for continuous improvement?
Calculate the roi for tellco : Calculate the ROI for Tellco for 2019, assuming that the $12,000 had been capitalized and depreciated over 10 years using the straight-line method.
Define the purpose of a face to face interview : Define the purpose of a face to face interview, whether you are an interviewer or an interviewee.
ECON1006 Introduction to Economics for Business Assignment : ECON1006 Introduction to Economics for Business Assignment Help and Solution, University of Greenwich - Assessment Writing Service
What is a example of a business strategy : What is a example of a business strategy that could potentially bring in business for a small business?
Define unexpected challenges the organization encountered : Select a major organization that was located in the Hurricane Katrina disaster area. Research their experiences and prepare a report detailing the unexpected.

Reviews

Write a Review

Managerial Accounting Questions & Answers

  Calculate materials price variance for materials purchased

Calculate the labour price variance. (Round answer to the nearest whole dollar, e.g. 5,275.) Calculate the materials price variance for materials purchased

  Find the company statement of cash flows prepared

Find the company's statement of cash flows prepared under the indirect method as, Dividends paid to a company's own stockholders of $80,000 would be shown?

  What are the four basic end user environments

What are the four basic end-user environments?

  Which the costs will be assigned using the abc system

Which The costs will be assigned using the ABC system? MobileCash Corporation operates a fleet of armoured cars that make scheduled

  Make an incremental analysis to assist with the decision

Make an incremental analysis to assist with the decision to make or buy the part and comment on the decision that management should make.

  What price would expect the stock to trade immediately

If the company decides on a 2-for-1 split, at what price would you expect the stock to trade immediately after the split goes into effect?

  Fixed and variable components of repair expense

Determine the fixed and variable components of repair expense using the high low method. Use copies made as the measure of activity.

  Compute simple rate of return and internal rate of return

Compute the Simple rate of return, Net present value and Internal rate of return. Should the company purchase the machine? Why or why not?

  Make in journal form the entries necessary to record stock

Make in journal form the entries necessary to record the stock transactions of the Hamilton Corp. during 2019. July 1 Retired the remaining shares.

  How the company has been very profitable

Trends sells paint and paint supplies, carpet, and wallpaper at a single-store location in suburban Baltimore. Although the company has been very profitable

  Determine the cost of ending work in process inventory

Determine the cost of ending work in process inventory and of the units transferred out to the next department.

  Compute the cost amount per unit

Tidewater Company, Compute the total manufacturing costs and the cost amount per unit for the production and sale of 50,000 units of Product K.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd