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Use Appropriate Information from the List Below to Calculate the Amounts

Question 72

Essay

Use appropriate information from the list below to calculate the amounts indicated.
Operating income $ 50,000
Adjusted after-tax operating income 35,000
Adjusted total assets 80,000
Average operating assets 90,000
Current liabilities 15,000
Revenue 120,000
Weighted average cost of capital 10%
a)Calculate return on investment
b)Calculate residual income
c)Calculate economic value added

Correct Answer:

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a)ROI = $50,000 / $90,000 = 55...

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