Ketchikan division in Alaskan Marine Services Corporation is considering purchasing a computerized diagnostic machine to aid...
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Ketchikan division in Alaskan Marine Services Corporation is considering purchasing a computerized diagnostic machine to aid in servicing marine diesel engines Present Diagnostic Overall machine Avg Operating Assets $100,000 $25,000 $125,000 Net Operating Income $20,000 $4,500 $24,500 Required return (15%) $15,000 $3,750 $18,750 Residual Income ROI Question: if you are evaluated based on ROI, will you invest in the machine? should the firm invest in the machine? Ketchikan division in Alaskan Marine Services Corporation is considering purchasing a computerized diagnostic machine to aid in servicing marine diesel engines Present Diagnostic Overall machine Avg Operating Assets $100,000 $25,000 $125,000 Net Operating Income $20,000 $4,500 $24,500 Required return (15%) $15,000 $3,750 $18,750 Residual Income ROI Question: if you are evaluated based on ROI, will you invest in the machine? should the firm invest in the machine?
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The requirement is to compute the residual income and the ROI Also made a decision on which machine ... View the full answer
Related Book For
Cornerstones of Cost Management
ISBN: 978-1285751788
3rd edition
Authors: Don R. Hansen, Maryanne M. Mowen
Posted Date:
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