Accounting: What the Numbers Mean
11th Edition
ISBN: 9781259535314
Author: David Marshall, Wayne William McManus, Daniel Viele
Publisher: McGraw-Hill Education
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Textbook Question
Chapter 3, Problem 3.6ME
Mini-Exercise 3.6
LO 6
Calculate
Required:
Calculate Firm N’s working capital and current ratio.
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q. 19
A frim has net working capital of $509, net fixed assets of $2,336, sales of $7,000 and current liabilities of $900. How many dollars worth of sales are generate from every $1 in total assets?
$3.00
$1.83
$1.53
$2.16
$2.39
Use the following information to answer the questions.
Company X
$ 12,480,000
$ 3,120,000
$
Company Y
$ 28,480,000
$ 7,120,000
512,640
8.50%
Company Z
$ 20,480,000
$ 5,120,000
532,480
10.40%
Sales
Average operating assets
Net operating income
Minimum required rate of return
561,600
8.00%
Required:
1. Compute the return on investment (ROI) for each company using the formula stated in terms of margin and turnover.
2. Compute the residual income (loss) for each company.
3. Each company is presented with an investment opportunity that would yield a 9% rate of return.
a. Assume performance is measured based on ROI. Indicate whether each company will likely accept or reject the investment
opportunity.
b. Assume performance is measured based on residual income. Indicate whether each company will likely accept or reject the
investment opportunity.
Complete this question by entering your answers in the tabs below.
Req 1
Req 2
Reg ЗA
Req 3B
Compute the return on investment (ROI) for each company…
Question Content Area
A company with working capital of $347,628 and a current ratio of 2.9 pays a $78,793 short-term liability. The amount of working capital immediately after payment is
Round your answer to the nearest dollar.
a. $451,797
b. $347,628
c. $104,169
d. $555,966
Chapter 3 Solutions
Accounting: What the Numbers Mean
Ch. 3 - Prob. 3.1MECh. 3 - Mini-Exercise 3.2 LO 3 ROI analysis using the...Ch. 3 - Mini-Exercise 3.3 LO 4 Calculate ROE Firm L had...Ch. 3 - Prob. 3.4MECh. 3 - Mini-Exercise 3.5 LO 6 Calculate current...Ch. 3 - Mini-Exercise 3.6 LO 6 Calculate working capital...Ch. 3 - Exercise 3.7 LO 2 Compare investment alternatives...Ch. 3 - Prob. 3.8ECh. 3 - Exercise 3.9 LO 2 Compare investment alternatives...Ch. 3 - Exercise 3.10 LO 2 Compare investment alternatives...
Ch. 3 - Exercise 3.11 LO 3 ROI analysis using the DuPont...Ch. 3 - Prob. 3.12ECh. 3 - Prob. 3.13ECh. 3 - Prob. 3.14ECh. 3 - Exercise 3.15 LO 6 Effect of transactions on...Ch. 3 - Exercise 3.16 LO 6 Effect of transactions on...Ch. 3 - Calculate profitability measures using annual...Ch. 3 - Prob. 3.18PCh. 3 - Problem 3.19 LO 6 Calculate and analyze liquidity...Ch. 3 - Problem 3.20 LO 6 Calculate and analyze liquidity...Ch. 3 - Problem 3.21 LO 3 Applications of ROI using the...Ch. 3 - Prob. 3.22PCh. 3 - Case 3.23 LO 3. 4, 6, 2 Focus company-analysis of...Ch. 3 - Case 3.24 LO 3, 4, 6, 7 Analysis of liquidity' and...
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