LET Companys financial results for the past two years follow. Required 1. Compute the companys profit margin,

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LET Company’s financial results for the past two years follow.


LET Company’s financial results for the past two years follow.


Required
1. Compute the company’s profit margin, asset turnover, and return on investment for this year and last year. Beginning total assets for last year were $160,000. (Round percentages to two decimal places.)
2. The desired return on investment for the company has been set at 10 percent. Compute LET’s residual income for this year and last year.
3. The cost of capital for the company is 5 percent. Compute the company’s economic value added for this year and last year.
4. Before drawing conclusions about this company’s performance, what additional information would youwant?

Cost Of Capital
Cost of capital refers to the opportunity cost of making a specific investment . Cost of capital (COC) is the rate of return that a firm must earn on its project investments to maintain its market value and attract funds. COC is the required rate of...
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Principles of Accounting

ISBN: 978-1133626985

12th edition

Authors: Belverd E. Needles, Marian Powers and Susan V. Crosson

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