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ROI and Residual Incomes

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ROI and Residual Incomes

BOATS
A B C D E
Revenues 5,500,000 8,300,000 10,400,000 12,800,000 20,400,000
Annual Expenses 3,800,000 8,200,000 9,100,000 9,900,000 18,900,000
Income 1,700,000 100,000 1,300,000 2,900,000 1,500,000

Book Value 0 5,200,000 6,100,000 5,200,000 8,300,000
Market Value 5,000,000 6,200,000 8,000,000 10,000,000 15,000,000

a. The cost of capital for the company's 10%.
b. What is the ROI of each boat using the market value of the investment in it?
c. What is the residual income of each boat using its book value?
d. What is the residual income of each boat using its market value?
e. Which trawler had the best year?

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This solution is comprised of a detailed explanation to find ROI and Residual Incomes of each boat.

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ROI residual incomes
________________________________________
NP 7.9 ROI and Residual Incomes

BOATS

A B C D E

Revenues 5,500,000 8,300,000 10,400,000 12,800,000 20,400,000

Annual Expenses 3,800,000 8,200,000 9,100,000 9,900,000 18,900,000

Income 1,700,000 100,000 1,300,000 2,900,000 1,500,000

Book Value 0 5,200,000 6,100,000 5,200,000 8,300,000

Market Value 5,000,000 6,200,000 8,000,000 10,000,000 15,000,000 ...

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