Did lohmanns overall performance improve from 20x1 to 20x2

Assignment Help Accounting Basics

Reference no: EM13484012

Lohorman Corp is a major supplier to makers of outdoor power equipment. According to the company's annual report, "management subscribes to the premise that the value of our company is enhanced if the capital invested in its operations yields a cash return that is greater than that expected by the provides of capital."

The following data are from Lohmann's aual report that incorporate EVA adjustments to operating profit and average invested capital

	20X1	20X2
Adusted before tax operating profit	$78,000	$80,000
Cash taxes	$20,500	$22,600
adjusted average invested capital	$650,000	$600,000
cost of capital	9.40%	9.40%

1.Compute the EVA for Lohmann for 20X1 and 20X2

2.Did Lohmann's overall performance improve from 20X1 to 20X2? Explain.

Reference no: EM13484012

Questions Cloud

Explain how using a risk-adjusted discount rate improves : explain how using a risk-adjusted discount rate improves capital budgeting decision making compared to using a single

Suppose each division is assessed a capital charge based on : roi and economic profit

Why is the coefficient of variation a better risk measure : why is the coefficient of variation a better risk measure to use than the standard deviation when evaluating the risk

Explain how to resolve a ranking conflict between the net : explain how to resolve a ranking conflict between the net present value and the internal rate of return. why should the

Did lohmanns overall performance improve from 20x1 to 20x2 : lohorman corp is a major supplier to makers of outdoor power equipment. according to the companys annual report

What is the decision rule for accepting or rejecting : what is the decision rule for accepting or rejecting proposed projects when using net present

Kate denton is confused about losses and gains on the sale : kate denton is confused about losses and gains on the sale of debt investments. explain these issues to katea how the

Prepare a tabulation of the contribution margin per unit : a chairs variable cost is 52 and its market value as a piece of unfinished furniture is 65 at a transfer point from the

Compute the miimu transfer price per wheels at which the : sherwin company makes bicycles. various divisions make components and transfer them to the dayton division for assembly

User Account

All Pages