The following information relates to Lionel Manufacturing Company for 20X7: Original cost of assets as of January
Question:
The following information relates to Lionel Manufacturing Company for 20X7:
Original cost of assets as of January 1, 20X6....................................................$200,000
Useful life of assets...............................................................................................10 years
Years of depreciation taken as of January 1, 20X7 (straight-line).......................1 year
Operating income gross of depreciation for 20X6............................................$ 40,000
Estimated salvage value........................................................................................$ 0
Required:
What is the ROI for 20X7, using the beginning-of-year book value of the assets?
Salvage ValueSalvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important...
Step by Step Answer:
Notes Net operating income Operating income before depreciation depreciati...View the full answer
Introduction to Managerial Accounting
ISBN: 978-1259105708
5th Canadian edition
Authors: Peter C. Brewer, Ray H. Garrison, Eric Noreen, Suresh Kalagnanam, Ganesh Vaidyanathan
