K. Johnson, Inc.'s managers want to evaluate the firm's prior-year performance in terms of its contribution to shareholder value. This past year, the firm earned an operating income return on investment of 12 percent, compared to an industry norm of 11 percent. It has been estimated that the firm's investors have an opportunity cost on their funds of 15 percent, which is the same as the firm's overall cost of capital. The firm's total assets for the year were exist100 million.

Required:
a. Compute the amount of economic value created or destroyed by the firm.
b. How does your finding support or fail to support what you would conclude using ratio analysis to evaluate the firm's performance?

Answers

Answer 1

Answer:

-3 million dollars

Explanation:

we have EVA = economic value added

to ge the EVA, we use this formula :

(operating return on the assets - cost of the total capital) multiplied by the total assets

total assets = 100 million

operating return = 12 percent

cost of capital = 15 percent

the EVA = 12% - 15% * 100000000

= -0.03 * 100000000

= -3,000,000 dollars

b. The loss of the value of the shareholder is happening even though the firm is earning ROI that is more than the average firm in the industry.


Related Questions

What types of new products could be targeted at low-income customers in emerging economies?

Answers

The Answer:One of the key sectors to benefi from the higher economic growth in emerging markets is the consumer-products sector. This is because the rising middle class consumers in these markets yearn for consumer goods such as tooth paste, household cleaning products, health and beauty products, appliances, instant foods.

The biggest advantage of emerging market investments is the potential for high growth. Diversification. International investments can be a good diversifier for your investment portfoliobecause economic downturns in one country or region, including the U.S, can be offset by growth in another.

Hope it helpsʕ·ᴥ·ʔAll Correctʕ·ᴥ·ʔ

The question is about demand in a low income consumer emerging economies.

In an Emerging Economies various types of products can be sold but we are targeting low-income customers, for which we can have a limited types of products.

The products that can be sold in an emerging economy to low income customers are;

- Low priced foods, which may include instant noodles, cheap canned foods etc.

- Low priced beauty products which may include cheap makeup, and herbal skin products.

- Low priced clothes which may include cheap t-shirts and pants.

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Your uncle is offering to sell you his T-shirt printing business for $1M. You think a multiple of 10X earnings (profit) is fair. His earnings are $69,000 per year. Should you buy it?

Answers

No because it is to expensive and the modern outfits are changing relatively quickly

Which of the following financial statements is also called a profit and loss statement?

Answers

Answer:

Also known as the profit and loss statement or the statement of revenue and expense, the income statement primarily focuses on the company's revenues and expenses during a particular period.

Based on the following information answer question Furniture manufacture has 3 units of standard direct material allowed for one unit of output. One unit of direct material is expected to be purchased on average at $10. During the period the manufacture has produced 7000 units of output 4 units of direct materials have been used. The direct materials have been purchased at $9 per unit. The total quantities of materials purchased were 30,000 units. 1.What is a standard cost for material? 2.What will be the total inputs allowed as per the budget for actual outputs achieved? 3.What is total actual direct material used to produce actual output? 4.What is the material price variance? 5.What is the material efficiency variance? 6.What will be flexible budget variance? 7.Which one of the following items would never appear on a cash budget?

Answers

1. The standard cost for material per output unit is $30 ($10 x 3).

2. The total inputs allowed for actual outputs achieved is 21,000 units (7,000 x 3).

3. The total actual direct material used for actual output is 28,000 units (7,000 x 4).

4. The material price variance is $28,000 Favorable {($10 - $9) x 28,000}.

5. The material efficiency variance is $70,000 Unfavorable (21,000 - 28,000) x $10.

6. The flexible budget variance is $28,000 Favorable ($280,000 - $252,000).

7. The item that would never appear on a cash budget is the Depreciation Expense.

Data and Calculations:

Standard units of input materials = 3 units

Average cost of a unit of materials = $10

Total cost of 3 units = $30 ($10 x 3 per unit output

Actual production = 7,000 units

Flexible units of materials = 21,000 units (7,000 x 3)

Actual units of materials used = 28,000 units (7,000 x 4)

Actual cost of materials purchased = $9 per unit

Thus, depreciation expense does not involve a cash flow.

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Jimmie is purchasing a home with a purchase price of $350,000. He has been approved for a loan with an 85% LTV. What is his down payment

Answers

Based on the information given the down payment is $52,500.

Using this formula

Down payment=(100%-Approved loan percentage)×Purchase price

Where:

Approved loan percentage=85%

Purchase price=$350,000

Let plug in the formula

Down payment=(100%-85%)×$350,000

Down payment=15%×$350,000

Down payment=$52,500

Inconclusion the down payment is $52,500.

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The language used in texting is acceptable in business writing. True or false

Answers

Answer: The answer is generally false.

Arial Company has two products: A and B. The company uses activity-based costing. The total cost and activity for each of the company's three activity cost pools are as follows:

Total Activity
Activity Cost Pool Total Cost Product A Product B Total
Activity 1 $22,000 400 100 500
Activity 2 $16,240 380 200 580
Activity 3 $14,600 500 250 750

The activity rate under the activity-based costing system for Activity 3 is closest to:

a. $70.45
b. $28.87
c. $19.47
d. $58.40
e. $32.5

Answers

Answer:

a

Explanation:

because it approaches to the total rates of the activity 3 it is the best avererage for that activity

To be useful, accounting information must have the fundamental qualitative characteristics of?

Answers

relevance and faithful representation

Which of the following is not a product design objective? Make the design easy to track for cost accounting purposes. Design a quality product. Design a product that meets customer requirements. Minimize production costs.

Answers

Amongst the options provided in the question, "Make the design easy to track for cost accounting purposes" only is not a product design objective.

Product Design

It is a process that requires cross-functional and knowledge-intensive work, which has become more demanding in today's competitive world.

It is set as one of the key strategies firms need to succeed in the market. These firms develop unique products using this process, as it provides them with the opportunity to set premium prices due to the uniqueness of the product.

Product Design Objective

For this process to succeed, the objective of the product design is, therefore, to produce goods or services with high quality, keeping the prices of the materials and the methods required to produce them at an acceptably low cost. Finally, the product must be competitive in the market in terms of its price, quality, design, and functionality. Thus making it meet the customer needs/wants.

Hence, the only point "Make the design easy to track for cost accounting purposes" is not a product design objective.

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To help reduce firefighting in network management, a network manager should spend time on ____________ to prevent problems

Answers

Answer:

Planning and Organizing the Network and Networking Staff

Explanation:

If this helped, please give brainliest answer! Thanks!

Help help help help

Answers

Answer:

B

Explanation:

The answer is B because the short-run Phillips curve is unemployment. When unemployment happens, it is decreasing and not increasing.

Grand Thornton's print ad states, "If you have a passion for accounting and want to work with others who share that passion, you might be interested in the Grant Thornton accounting firm." This ad is an example of

Answers

The printed ads of Grand Thornton is an example of corporate image advertising.

Basically, a corporate image advertising is a form of advertisement done when the firm promotes itself in order to

portray positive perceptionincrease its brand awarenessappear relevant.

In conclusion, the printed ads of Grand Thornton is an example of corporate image advertising.

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Which of the following is not a characteristic of rent controls?

Lower expenditures on maintenance

Greater availability of apartments

Fewer newly built apartment buildings

Excess demand for apartments

Answers

The answer is: B - Greater availability of apartments.

The greater availability of apartments is not one of the tools that can characterize rent control.

The term rent control refers to the rules and regulations that are given by the policymakers. The rent control can reduce the quality and the rental housing units.

Hence the option B is correct.

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Suppose the economy is in long-run equilibrium. If there is a sharp increase in the minimum wage as well as an increase in taxes, then in the short run, real GDP will:____.
a. rise and the price level might rise, fall, or stay the same. In the long run, the price level might rise, fall, or stay the same but real GDP will be unaffected.
b. fall and the price level might rise, fall, or stay the same. In the long run, the price level might rise, fall, or stay the same but real GDP will be unaffected.
c. rise and the price level might rise, fall, or stay the same. In the long run, the price level might rise, fall, or stay the same but real GDP will be lower.
d. fall and the price level might rise, fall, or stay the same. In the long run, the price level might rise, fall, or stay the same but real GDP will be unaffected.

Answers

Suppose the economy is in the long run equilibrium. If there is a sharp increase in the minimum wage as well as an increase in taxes then in the short run, real GDP will

fall and the price level might rise, fall, or stay the same. In the long run, the price level might rise, fall, or stay the same but real GDP will be lower.

Given that this economy is in the long run equilibrium. Given a sharp increase in minimum wage and taxes, then real GDP will decrease in the short run as well as the price level.

In the long run it may stay the same. But the Real GDP will definitely be lower.

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What is one major measure of economic growth?

Answers

Answer:

yo mama

Explanation:

yo mama's so ugly, she made a blind kid cry.

Help Plsss Ill give brainlest

Danielle is a cosmetologist who specializes in hair color. What skill might benefit Danielle in her career?

Question 10 options:

Danielle enjoys working alone.


Danielle likes math and solving puzzles.


Danielle is friendly and outgoing.


Danielle is competitive and likes sports.

Answers

Answer: Danielle is friendly and outgoing

Explanation: she works with other people and specializes on people’s hair color

When store owners quote prices in terms of dollars, money is acting as a __________. a.) store of value b.) medium of exchange c.) unit of account d.) commodity

Answers

When store owners quote prices in terms of dollars, money is acting as a unit of account.

Money is anything that is generally chosen and accepted by a community as a medium of exchange and standard of value.

Money act as a unit of account because everything in the economy is quoted in terms of it. The price of any products or goods are quoted in terms of money.

Since there are many buyers and sellers in a country, unit of account stands as standard measurement for everyone in an economy; hence the foundation of every transaction in an economy.

Therefore, money is acting as a unit of account when store owners quote prices in terms of dollars.

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What is General training?​

Answers

Answer:

The training focusing on the theoretical knowledge is called general training.

Answer:

What is General training?

General Training measures English language proficiency in a practical, everyday context.

HELP

When a consumer is making more money, the demand curve shifts to the right. Why is this?

Answers

The demand curve shifts to the right because the consumer is able to afford larger quantities of the product. I believe the answer is C.

Help me please

With one worker, total production is 100. When a second worker is added, total product

increases to 300. The marginal product of the second worker is ….???
100.

200.

400.

300.

Answers

Total production is 100

let the product of second worker be x

then 100+x = 300

x = 200

The marginal product of the second worker is 200

The ________ method of setting an advertising budget typically overlooks how promotion affects sales.

Answers

Based on business management, the affordable method of setting an advertising budget typically overlooks how promotion affects sales.

What is the Affordable method in the Advertising budget?

The affordable method in the advertising budget is the cheap means of making an advertisement.

However, when making cheap or affordable advertisements, most people tend to overlook the effects of promotion efforts on sales.

Hence, in this case, it is concluded that the correct answer is "Affordable method."

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Which of the following defines a short-term goal?

A. tasks that you set to accomplish specific things in a short period of time

B. tasks that must be completed for a job performance evaluation

C. tasks that you must complete that require time and planning that usually take 12 months or more to complete

D. tasks that you think you need to accomplish in the future but need to start working on now

Answers

Answer:

I think its a

Not sure

Explanation:

.....

Would you want to work for a company that has chosen to be a conscious marketer? Why or why not? Support your decision by discussing at least one positive and one negative about working for this kind of company.

Answers

Answer:

You would want to work for one because it had a lower chance of getting closed or loosing money. A positive is wiser spending. A con is not taking all the risks.

Explanation:

Hope this helps!

You receive a $15,000 signing bonus from your new employer and decide to invest it for 2 years. Your banker suggests two alternatives, which both require a commitment for the full 2 years. The first alternative will earn 8% per year for both years. The second alternative earns 6% for the first year and 10% for the second year. Interest compounds annually. Which would you choose? Justify your choice by the calculations.

Answers

Answer:

8% plus 8%

Explanation:

8% plus 8% will yield 16.64% total and the 6% and 10% yields 16.60% total

Are the consequences of your decision something you can live with and feel proud of when other people find out? Why or why not?

Answers

At the end of the day people need to respects everyone’s decisions because it always has consequences depending on what they did , if someone is doing so good then they should feel proud it can be so many things it could be people that have mental issues and it stops them from doing some stuff but then they do something for them to feel good breaking the cycle , like there’s other who choose to do bad stuff now some people think is okay but it’s really not and consequences will always be there

Presented below are selected transactions for Werley Company for 2021. Jan. 1 Received $9,000 scrap value on retirement of machinery that was purchased on January 1, 2011. The machine cost $90,000 on that date, and had a useful life of 10 years with no salvage value. April 30 Sold equipment for $34,000 that was purchased on January 1, 2018. The equipment cost $90,000, and had a useful life of 5 years with no salvage value. Dec. 31 Discarded a business truck that was purchased on April 1, 2017. The truck cost $27,000 and was depreciated on a 5-year useful life with a salvage value of $2,000. Journalize all entries required as a result of the above transactions. Werley Company uses the straight-line method of depreciation and has recorded depreciation through December 31, 2020. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Record journal entries in the order presented in the problem. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit choose a transaction date Jan. 1 enter an account title to record depreciation expense enter a debit amount enter a credit amount enter an account title to record depreciation expense enter a debit amount enter a credit amount enter an account title to record depreciation expense enter a debit amount enter a credit amount enter an account title to record depreciation expense enter a debit amount enter a credit amount choose a transaction date April 30 enter an account title to record depreciation expense enter a debit amount enter a credit amount enter an account title to record depreciation expense enter a debit amount enter a credit amount (To record depreciation expense) choose a transaction date April 30 enter an account title to record sale of equipment Cash enter a debit amount 34000 enter a credit amount enter an account title to record sale of equipment Accumulated Depreciation-Equipment enter a debit amount

Answers

Based on the information given the appropriate journal entry to record the transactions are:

Werley Company Journal entries

1. Jan 2020

Debit Cash $ 9,000

Credit Accumulated depreciation - machinery $90,000

($90,000/10×10)

Credit Machinery $ 90,000

Credit Gain on retirement of assets $9,000

($9,000+$90,000-$90,000)

2. Apr-30

Debit Depreciation expense $6,000

($90,000/5×4/12)

Credit accumulated depreciation-Equipment $6,000

Debit Cash $34,000

Debit Accumulated depreciation $60,000

($90,000/5)×3 1/3) [(2018-2021)+(Jan 2021 to April 2021)]

Credit Equipment $90,000

Credit Gain on disposal of plant assets $4,000

[$34,000-($90,000-$60,000)]

3. Dec-30

Debit Depreciation expense $5,000

[($27,000-$2,000)/5]

Credit accumulated depreciation-Equipment $5,000

Debit Accumulated depreciation- Equipment $23,750

($5,000×4 3/4)  [(2017-2021)+(April 2021 to Dec 2021)]

Debit Loss on disposal $3,250

($27,000-$23,750)

Credit Equipment $27,000

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A group of 10 golfing buddies have the following annual incomes: $32,000, $12,000, $56,000, $120,000, $10,000, $38,000, $70,000, $16,000, $20,000, $24,000. The share of income received by the lowest quintile of this income distribution is

Answers

The lowest quintile received $22,000.

Data and Calculations:

The number of golfing buddies = 10

A. = $10,000

B.  = $12,000

C.  = $16,000

D.  = $20,000

E.  = $24,000

F.  = $32,000

G.  = $38,000

H.  = $56,000

I.  = $70,000

J.  = $120,000

Total - $398,000

The lowest, first, or bottom quintile is between 0 to 20%.

Thus, the lowest quintile received $22,000 ($10,000 + $12,000) from the income distribution.

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Why are developing countries experiensing rapid population growth while developed countries are growing slowly or not at all?​

Answers

Answer:

Population growth in developing countries will be greater due to lack of education for girls and women, and the lack of information and access to birth control.

Carry learning!

Study hard!

Brainliest please!

Thank you

If you liquidate $3,000 of your money market mutual fund and transfer the funds to your checking account, then initially, M1 will ________ and M2 will ________. Group of answer choices

Answers

if one liquidate $3,000 of one's mutual fund and transfer them to checking account, then, the M1 will increase and M2 will not increase

Liquidation in this case refers to transfer of mutual fund to one's accessible account for personal use.

Let understand that M1 in money supply includes physical currency, demand deposits, checkable deposits.

M2 in money supply includes cash, checking deposits, easily convertible near money.

In conclusion, if one liquidate $3,000 of one's mutual fund and transfer them to checking account, then, the M1 will increase and M2 will not increase

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A 7-year, $1,000 par bond has an 8% annual coupon and is currently yielding 7.5%. The bond can be called in 3 years at a call price of $1,010. What is the bond yielding, assuming it will be called (known as the yield to call)?

Answers

The Yield to call is 7.30%

Par value of Bond (FV) = $1,000

Annual Coupon (A) = 8%*1,000 = $80

Years until maturity = 8

Current YTM = 7.5%

We need to calculate the Current Price of Bond (PV)

PV = 80 * (P/A, 0.075, 7) + 1000 * (P/F, 0.075, 7)

PV = $1,026.48

Call Price = $1,010

Call Period = 3 years

Yield to call = ytc

1026.48 = 80* (P/A, ytc, 3) + 1010 * (P/F, ytc, 3)

Using the trail and error method,

Yield to call = 7.30%

In conclusion, the Yield to call is 7.30%

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Write a program that generates an array filled up with random positive integernumber ranging from 15 to 20, and display it on the screen.After the creation and displaying of the array , the program displays the following:[P]osition [R]everse, [A]verage, [S]earch, [Q]uitPlease select an option:Then, if the user selects:-P (lowercase or uppercase): the program displays the array elements position andvalue pairs for all member elements of the array.-R (lowercase or uppercase): the program displays the reversed version of thearray-A (lowercase or uppercase): the program calculates and displays the average of thearray elements-S (lowercase or uppercase ): the program asks the user to insert an integer numberand look for it in the array, returning the message wheher the number is found andits position ( including multiple occurences), or is not found.-Q (lowercase or uppercase): the program quits.NOTE: Until the last option (q or Q) is selected, the main program comes back atthe beginning, asking the user to insert a new integer number. Which of the following is a factor of 6x^3 + 6? For both clinical and cosmetic reasons, plastic surgeons inject substances into connective tissue underlying the skin epidermis. This plumps up areas deficient in soft tissue, and is used to reduce surgical scars or wrinkles, for example. Which normal connective tissue components are good candidates to be injected as fillers in this type of procedure Solve for xX-8 = -10A) X = 2B) X = -2C) X = 18D) X = -18 The length L of the base of a rectangle is 5 less than twice its height H. Write the algebraic expression to model the area of the rectangle. Which of the following statements is true?A. ASC 740 focuses on the income tax expense or benefit on the income statementB. ASC 740 focuses on the balances in the deferred tax assets and liabilities on the balance sheetC. ASC 740 focuses on the income taxes paid or refunded in the Statement of Cash FlowsD. ASC 740 focuses on the computation of a company's effective tax rate in the income tax note to the financial statements Margaret bought a video game, her father gave her 0.2 of the money, her aunt gave 0.5 of the money and she saved the rest. She saved $168 so what amt of money did her father give PLEASE HELP!!!Evaluate each expression.(252) = Can someone help me out B. Find words from the text that are opposite in meaning to the following words. i) individually ii) autocracy iii) disregard iv) stop v) starting vi) support vii) luckily viii) released ix) initially x) gladly write a introduction about how new York city housing garbage is bad what the government should do or has done Fermat fc won 45% of the 60 games they played last season. How many games did fermat fc win last season indentify the explicit function for the sequence in the table 5. Steve is driving in his car to take care of some errands. The first errand has him driving to a location 2 km East and 6 km North of his starting location. Once he completes that errand, he drives to the second one which is 4 km East and 2 km South of the first errand. What is the magnitude of the vector that describes how far the car has traveled from its starting point, rounded to the nearest km? 15- A racehorse coming out of the gate accelerates from rest to a velocity f 15.0 m/s due west in 1.80 s. What is its average acceleration? Marisas parents immigrated to the United States from India before she was born. Marisa constantly fights with her mother because she wants more freedom like the rest of her friends. However, Marisa is also not comfortable wearing as revealing clothes as many of her American friends. According to Erikson, Marisa is struggling with the ________ psychosocial crisis.Group of answer choices Find the value of the constant m 150 - 12m + 54 = 0 Now there is a square city of unknown size with a gate at the center of each side. There is a tree 20 b from the north gate. That tree can be seen when one walks 14 bu from the south gate, turns west and walks 1775 bu. Find the length of each side of the city. Suppose that in the rice market demand shifts due to a new rice diet that is being marketed in the U.S. as a cure for cancer. Simultaneously the supply curve shifts due to a flood that affects the rice crop in California. What is the most likely outcome in this situation What are benefits of cycling? Write an essay