Managerial Accounting Homework Revew Chapter 12 Answer Key

Managerial Accounting Homework Revew Chapter 12 Answer Key...

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Chapter 12 Decentralization and Performance Evaluation Chapter 12 Decentralization and Performance Evaluation 12- 1
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interest expense = Net income + interest expense (1 - tax rate) = $16,000,000 + $1,300,000 (1 - .4) = $16,780,000 Invested capital = Total assets - noninterest-bearing current liabilities = $225,000,000 - $30,000,000 = $195,000,000 ROI = NOPAT ÷ Invested capital = $16,780,000 ÷ $195,000,000 = 8.61 percent E10. NOPAT = Net income + Interest expense - Tax savings related to the interest expense = Net income + interest expense (1 - tax rate) = $2,500,000 + $1,800,000 (1 - .40) = $3,580,000 Invested capital = Total assets - noninterest-bearing current liabilities = $60,000,000 - $5,000,000 = $55,000,000 Residual Income/EVA = NOPAT - (Cost of capital × Invested capital) = $3,580,000 - (.10 × $55,000,000) = $3,580,000 - $5,500,000 = ($1,920,000) E11. NOPAT = Net income + Interest expense - Tax savings related to the interest expense = Net income + interest expense (1 - tax rate) = $2,000,000 + $1,800,000 (1 - .35)
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This note was uploaded on 09/22/2009 for the course BUSINESS ACG 2071 taught by Professor Love during the Fall '09 term at Florida State College.

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Managerial Accounting Homework Revew Chapter 12 Answer Key...

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