The Magazine Division of Continental Publishing Company had the following financial data for the year: Assets available for use $1,000,000 Book Value $1,500,000 Market Value Residual income $100,000 Return on investment 15% Refer to Continental Publishing Company. What was the target rate of return for Continental Publishing Company?
a. 10%
b. 15%
c. 25%
d. 5%
D
Net Income - (Target Rate ? Asset Base) = Residual Income
$150,000 - (Target Rate ? $1,000,000) = $100,000
(Target Rate ? $1,000,000) = $50,000
Target Rate = 5.0%
You might also like to view...
An inverted triangle with the letter "N" represents a file in "name" order
Indicate whether the statement is true or false
Disclosures You are a staff auditor on the audit of Cosmo Technologies, Inc The audit partner asks you to carefully read the new mortgage contract with the Hometown Bank and abstract all pertinent information that might be needed for a financial
disclosure. Required: (1) List the information in a mortgage that is likely to be relevant to the auditor. (2) What are the pros and cons of using a disclosure checklist for this task?
Which sentence is correctly punctuated?
A) We will process your claim when we receive a copy of your receipt. B) We will process your claim; when we receive a copy of your receipt. C) We will process your claim, when we receive a copy of your receipt.
A good way for most U.S. companies to learn about consumer behavior in other regions of the world is to
A. visit the country and get to know its people. B. use local marketing research companies in other countries. C. generalize from U.S. marketing research. D. conduct global marketing research in the United States. E. take advantage of the wealth of secondary data that are available.