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Question - Three divisions of Jameson Co report the following sales and operating data
Fitness Training
Spa Services
Athletic Wear
Sales
$600,000
$750,000
$400,000
Average operating assets
200,000
250,000
100,000
Operating income
30,000
37,500
24,000
Minimum required rate of return
10%
12%
Required -
1. Compute the ROI for each division.
2. Compute the residual income for each division.
3. Assume that each division is presented with an investment opportunity that would yield a rate of return of 17%.
a) If performance is being measured by ROI, which division or divisions will probably accept the opportunity? Reject it? Why?
b) If performance is being measured by residual income, which division or divisions will probably accept the opportunity? Reject it? Why?
Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest. How much control does the Fed have over this longer real rate?
Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.
Accounting problems, Draw a detailed timeline incorporating the dividends, calculate the exact Payback Period b) the discounted Payback Period. the IRR, the NPV, the Profitability Index.
Term Structure of Interest Rates
Write a report on Internal Controls
Prepare the bank reconciliation for company.
Create a cost-benefit analysis to evaluate the project
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Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.
Simple Interest, Compound interest, discount rate, force of interest, AV, PV
CAPM and Venture Capital
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