Purchase Solution

Residual Income of a Company

Not what you're looking for?

Ask Custom Question

A company reported the following information for FY 2004:

Sales $500,000
Average operating Assets $300,000
Desired ROI 10%
Net Income $45,000

Based on this information, calculate the company's residual income for 2004.

Purchase this Solution
Solution Summary

This solution shows step-by-step calculations to determine the company's residual income using the net income, desired ROI and average operating assets.

Solution Preview

A company reported the following information for FY 2004:

Sales $500,000
Average operating Assets $300,000
Desired ROI 10%
Net Income ...

Purchase this Solution
Free BrainMass Quizzes
Business Ethics Awareness Strategy

This quiz is designed to assess your current ability for determining the characteristics of ethical behavior. It is essential that leaders, managers, and employees are able to distinguish between positive and negative ethical behavior. The quicker you assess a person's ethical tendency, the awareness empowers you to develop a strategy on how to interact with them.

Social Media: Pinterest

This quiz introduces basic concepts of Pinterest social media

Organizational Behavior (OB)

The organizational behavior (OB) quiz will help you better understand organizational behavior through the lens of managers including workforce diversity.

Situational Leadership

This quiz will help you better understand Situational Leadership and its theories.

MS Word 2010-Tricky Features

These questions are based on features of the previous word versions that were easy to figure out, but now seem more hidden to me.

View More Free Quizzes
Related BrainMass Solutions

  • Residual income and EVA

    286056 Residual income and EVA See attached file. Saba Signs Company has provided the following data: The company requires a residual income of 6%. Required: a) Determine the residual income before and after the additional investment.

  • Calculate Residual Income for Midlands Design Ltd.

    265441 Calculate Residual Income for Midlands Design Ltd. Residual Income [LO3] Midlands Design Ltd. of Manchester, England, is a company specializing in providing design services to residential developers.

  • Return on investment, residual income, and economic value added.

    Residual income: Residual income is the net income that an investment earns over the minimum rate of return on its operating assets.

  • Company X's Residual Income

    Company X's residual income would be: 6,200 1,400 370 400 Company X's residual income would be: Net operating Income- required rate of return*average opertiing assets 3700-3300 $400 This provides the steps to calculate the Company

  • Problems involving residual Income

    381608 Problems involving residual Income The following information is available on Company A: Sales..$900,000 Net Operating income $36,000 Stockholder's equity.$100,000 Average operating assets..$180,000 Minimum required rate of return 15%

  • Residual Claim to Income

    It can be argued that the stockholders have a residual claim to income because of their involvement in the company.

  • Residual Income Long Beach Pharmaceutical Company

    Compute each division's residual income for the year under each of the following assumptions about the firm's cost of acquiring capital. (Negative amounts should be indicated by a minus sign.

  • Explain the term residual claim to income for shareholders

    Before any residual income is earmarked for common shareholders, the Board of Directors will first determine whether the company should retain residual income for any number of reasons.

  • Residual income

    The return on investment last year for the Hum Division was: Return on Investment = Net Operating Income/Average Operating Assets =120000/600000 =20% =Answer The performance of the company is good as its Residual Income is positive and ROI is

  • Residual operating income

    287006 Residual operating income The Coca-Cola Company reported an after-tax profit margin of 20.0 percent on its sales of $24,088 million in 2006.

View More Related Solutions