Question: I AaBbCe AaB ise, r.! A . ay. A-l . a-ea. E TNler nalIINGSpa. Heading 1 Heading 2 Title Subtitle Subtle En. Emphasis Intense E
I AaBbCe AaB ise, r.! A . ay. A-l . a-ea. E TNler nalIINGSpa. Heading 1 Heading 2 Title Subtitle Subtle En. Emphasis Intense E . St. Font Jacksonville, Florida to various islands in the Caribbean. The following information is available for 2016 2016 Revenue NOPAT Depreciation $ 104,500,000 4,500,000 2,860,000 0.350 0.100 37,585,000 Cost of capital Total assets Noninterest bearing current Required a. Calculate residual income for 2016. b. The company's cargo warehouse in Jacksonville was constructed in 1965 and has safety and environmental problems. The CEO of Jupiter, Aman Brown, believes that a new warehouse must be constructed if the company is to be competitive in the future. The cost of a new warehouse would be $10,000,000 with a 40 year life. Since the company has more than $4,000,000 of annual free cash flows, and the cost of capital is only 10%, it is clear to Aman that the investment is Residual Income (also known as EVA) and, thus, Aman is interested in how the t will affect this measure
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