Requirements 1. Calculate residual income, assuming Doorsong defines investment as total assets. 2. Calculate EVA for...
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Requirements 1. Calculate residual income, assuming Doorsong defines investment as total assets. 2. Calculate EVA for the year. Adjust both the year-end assets and operating income for advertising assuming that for the purposes of economic value added the advertising is capitalized and amortized on a straight-line basis over 4 years. 3. Discuss the difference between the outcomes of requirements 1 and 2. Which measure would you recommend, and why? Requirements 1. Calculate residual income, assuming Doorsong defines investment as total assets. 2. Calculate EVA for the year. Adjust both the year-end assets and operating income for advertising assuming that for the purposes of economic value added the advertising is capitalized and amortized on a straight-line basis over 4 years. 3. Discuss the difference between the outcomes of requirements 1 and 2. Which measure would you recommend, and why?
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