Questions from Financial Accounting

Q: Welling house Industries has established a 10 percent target ROI for its

Welling house Industries has established a 10 percent target ROI for its divisions. The following data have been gathered for the Ionia Division’s operations for the previous year: Revenues = $30,000,...

Q: The weighted-average cost of capital of Eagle Ridge is 8

The weighted-average cost of capital of Eagle Ridge is 8 percent. Last year, one of Eagle Ridge’s divisions generated an EVA of $3,200,000, while the division’s assets less its current liabilities wer...

Q: In June, current year, Wendy Winger organized a corporation to

In June, current year, Wendy Winger organized a corporation to provide aerial photography services. The company, called Aerial Views, began operations immediately. Transactions during the month of Jun...

Q: Compensation for top executives (e.g., CEOs and CFOs

Compensation for top executives (e.g., CEOs and CFOs) has become more variable over time. For example, recent data show that in large corporations only 20 percent of CFO pay is fixed and 80 percent is...

Q: Rico Petricelli Industries invests $960,000 in plant assets with

Rico Petricelli Industries invests $960,000 in plant assets with an estimated 10-year service life and no salvage value. These assets contribute $64,000 to annual net income when depreciation is compu...

Q: Sam’s Gardening Centers has multiple stores in the northeastern United States.

Sam’s Gardening Centers has multiple stores in the northeastern United States. Sam’s is considering investing in an online store. In addition to the identifiable cash flows such as increased sales and...

Q: Bramblett Recording Studio is considering two investment proposals (1 and 2

Bramblett Recording Studio is considering two investment proposals (1 and 2). Data for the two proposals are presented here. Calculate the return on average investment for both proposals.

Q: Rommel Fabrics is considering an investment proposal with a negative net present

Rommel Fabrics is considering an investment proposal with a negative net present value of $50 when a discount rate of 9 percent is used. The same proposal has a positive net present value of $400 when...

Q: Hawkins Poultry Farms is considering the purchase of feeding equipment that costs

Hawkins Poultry Farms is considering the purchase of feeding equipment that costs $139,000 and will produce annual cash flows of approximately $36,000 for five years. The equipment is expected to be s...

Q: An analysis of the Marketable Securities control account of Fancier Products,

An analysis of the Marketable Securities control account of Fancier Products, Inc., shows the following entries during the year. In addition, the company’s income statement includes...