Question: Isabelle Abiassi operates a popular summer camp for elementary school children. Projections for the current year are as follows: Sales revenue Operating income Average assets

Isabelle Abiassi operates a popular summer camp for elementary school children. Projections for the current year are as follows: Sales revenue Operating income Average assets $7,320,000 $641,500 $3,664,000 The camp's weighted average cost of capital is 11%, and Isabelle requires that all new investments generate a return on investment of at least 15%. The camp's current tax rate is 25%. At last week's advisory board meeting, Isabelle told the board that she had up to $50,000 to invest in new facilities at the camp and asked them to recommend some projects. Today the board's president presented Isabelle with the following list of three potential investments to improve the camp facilities. Swimming Pool $ 4,488 37,400 Playground $3,795 25,300 Incremental operating income Average total assets Gym $ 2,603 13,700 X Your answer is incorrect. Calculate the return on investment, residual income, and economic value added for each of the three projects. (Enter negative amounts using either a negative sign preceding the number, e.g. -45 or parentheses, e.g. (45). Round Economic Value Added answer to 2 decimal places, e.g. 15.25 & all other answers to 0 decimal places, e.g. 15 or 15%.) Playground Pool Gym Return on Investment % % % $ $ $ Residual Income Economic Value Added $ $ $
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