Forum Replies Created
- Posts
Hello sir,
I have problems with this question. Can you teach me how to solve its.
1) A division is considering a capital investment $6.5m. The expected life of the investment is expected to be 40 years, with no resale value at the end of the period. The forecast return on investment 20% per annum before depreciation. The division cost of capital is 10%. What is the expected annual residual income of the initial investment?
2) At the start of the year, a division has non-current assets of $6M and makes no addition or disposals during the year. Depreciation is charged at 10% per annum on all non-current assets. Working capital is $0.75m at the start of the year and is expected to increase by 20% by the end of years. The budgeted profit of the division after depreciation is $1.8m. What is the expected ROI of the division for the year, based on average capital employed?
Thank you.
How to solve this?
1) A division is considering a capital investment $6.5m. The expected life of the investment is expected to be 40 years, with no resale value at the end of the period. The forecast return on investment 20% per annum before depreciation. The division cost of capital is 10%. What is the expected annual residual income of the initial investment?
2) At the start of the year, a division has non-current assets of $6M and makes no addition or disposals during the year. Depreciation is charged at 10% per annum on all non-current assets. Working capital is $0.75m at the start of the year and is expected to increase by 20% by the end of years. The budgeted profit of the division after depreciation is $1.8m. What is the expected ROI of the division for the year, based on average capital employed?
Hello sir,
Please help me solve this. Why answer is $110?
External selling price x:$80 y:$100
Variable cost x:$60 y:$70
Contribution x:$20 y:$30
Labours hour per units x:5 Hours y:10 HoursThe company have limited labours hours available, and another division requires product y.
What is the minimum transfer price that should be charged to achieved goal congruence?