pters 9-12 Take Home Problems ne SAY. Write your answer in the space provided or

Question

pters 9-12 Take Home Problems ne SAY. Write your answer in the space provided or on a separate sheet of paper. 1) An investment center of Lannigan Company reported operating income of $330,000 on total operating assets of $2,600,000 during the current year. The company has established a target ROI of 13% for the investment center. Last year, the investment center's ROI was 12.2%. Required: Calculate the return on investment for the investment center for the current year. Compare its performance with both the performance from the previous year and the target ROL l cost 2) In Year 1, Chandler Company purchased equipment with an expected useful life of 5 years. The init a the equipment was $85,000. Chandler's cost of capital is 12%. At the time it purchased the equipment Chandler projected the following cash inflows from use of the equipment: Year 2 4 Projected Cash Inflow $ 20,000 $ 30,000 35,000 S 25,000

Explanation / Answer

Dear Student Thank you for using Chegg Please find below the answer and please give thumbs up   Statementshowing Computations Paticulars Amount Operating income         330,000.00 Total operating assets      2,600,000.00 Return on investment = 330,000/2,600,000 12.69% As compared to previous year the performance of investment center is better as it has more ROI as compared to previous year which means it is more efficiently managing its assets Howver company is a little behind its target ROI of 13%

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.