Carter Corporation has a target return of 15%. If a prospective investment has an estimated return on investment of 20%, and a residual income of $10,000, what is the estimated cost of the investment?
a. $200,000
b. $ 66,667
c. $ 50,000
d. The answer can't be determined from this information.
A
0.20 - 0.15 = 0.05 residual income
$10,000 / 0.05 = $200,000
You might also like to view...
Jill Pill has been promoted from assistant manager to Manager of Willie Oyster House. She is now given responsibility from 10 to 50 staff members. As a result, her __________ has increased.
a. Esteem power b. Task command c. Span of control d. Centralization
Chang Industries has 2,000 tables that cost $115 each to produce. Each table can be sold as is for $221 or finished with a stain or paint. The cost to add a finish to each table is $75. Finished tables can be sold for $310. Chang should:
A. Finish the table for profit of $89 per table. B. Sell unfinished tables for $106 incremental revenue per table. C. Finish the table for incremental cost of $190 per table. D. Sell the unfinished tables for profit of $195 per table. E. Finish the table for profit of $14 per table.
In the context of quality improvement methods, ________ can be best described as using a formal process in which teams study processes and correct problems to limit defects to 3.4 per million operations.
A. total quality management B. Six Sigma C. lean process improvement D. zero-defects approach
The purchase of an existing business should undergo the same scrutiny as the start-up of a new business
Indicate whether the statement is true or false