Jefferson Memorial Hospital is an investment center as a division of Hospitals United. During the past year, Jefferson reported an after-tax income of $7 million. Total interest expense was $3,400,000, and the hospital tax rate was 30%. Total assets totaled $70.3 million, and non-interest-bearing current liabilities were $23,300,000. The required rate of return established by Jefferson is equal to 17% of invested capital. What is the residual income of Jefferson Memorial Hospital? Enter your answer in whole dollar.
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- Jefferson Memorial Hospital is an investment center as a division of Hospitals United. During the past year, Jefferson reported an after-tax income of $7.2 million. Total interest expense was $3,100,000, and the hospital tax rate was 30%. Total assets totaled $69.6 million, and non-interest-bearing current liabilities were $22,500,000. The required rate of return established by Jefferson is equal to 17% of invested capital. What is the residual income of Jefferson Memorial Hospital? Enter your answer in whole dollar.Jefferson Memorial Hospital is an investment center as a division of Hospitals United. During the past year, Jefferson reported an after-tax income of $7.2 million. Total interest expense was $3,300,000, and the hospital tax rate was 30%. Total assets totaled $70.4 million, and non-interest-bearing current liabilities were $23,000,000. The required rate of return established by Jefferson is equal to 18% of invested capital. What is the residual income of Jefferson Memorial Hospital? Enter your answer in whole dollar. $fill in the blank 1Jefferson Memorial Hospital is an investment center as a division of Hospitals United. During the past year, Jefferson reported an after-tax income of $7 million. Total interest expense was $3,400,000, and the hospital tax rate was 30%. Total assets totaled $70.5 million, and non-interest- bearing current liabilities were $22,700,000. The required rate of return established by Jefferson is equal to 18% of invested capital. What is the residual income of Jefferson Memorial Hospital? Enter your answer in whole dollar.
- BE SURE TO SAVE YOUR ANSWERS FREQUENTLY. Oak Lawn, Inc. has been provided by its lenders and owners with $58,000,000 to purchase assets. The most recent income statement showed Earnings Before Interest and Taxes (EBIT, or Operating Income) of $11,400,000, and net income of $7,250,000. Income tax is paid at a 23% combined state plus federal average annual rate. What was Return on Invested Capital (ROIC) for the year? OA. 9.625% B. 15,134% OC.4.521% D. 12.500% E. 24.759%Use the composition of federal outlays and receipts and assume that the total revenue for the year is $ 3 trillion. Social Secuirty and Medicare are 32%. Calculate how much revenue came from Social Secuirty , give the answer in billions.The employee credit union at State University is planning the allocation of funds for thecoming year. The credit union makes four types of loans to its members. In addition,the credit union invests in risk-free securities to stabilize income. The various revenueproducinginvestments, together with annual rates of return, are as follows: The credit union will have $2 million available for investment during the coming year.State laws and credit union policies impose the following restrictions on the compositionof the loans and investments: of the loans and investments:Risk-free securities may not exceed 30 percent of the total funds available for investment.Signature loans may not exceed 10 percent of the funds invested in all loans (automobile,furniture, other secured, and signature loans).Furniture loans plus other secured loans may not exceed the automobile loans.Other secured loans plus signature loans may not exceed the funds invested in risk-freesecurities. How should the $2 million…
- Worthwhile Hospital has a total capital expenditure budget for the next year of $5 million dollars. Of this amount, $3 million dollars is already committed as spending for capital assets that have already been acquired and are in place. The remaining $2 million dollars is available for new assets and for new projects or programs. Worthwhile Hospital typically divides the available capital expenditure funds into monies available for inpatient purposes and monies available for outpatient purposes. This year the split is proposed to be 50-50. The hospital's CFO is also proposing that a scoring system be used to evaluate this year's proposals. She has set up a scoring system that allows a maximum of five points. Thus the low is a score of one point and the high is a score of five points. In addition to the points earned by a funding proposal, the CFO will allow one "bonus point" for upgrading existing equipment and one "bonus point" for funding expansion of existing programs. Jody…Worthwhile Hospital has a total capital expenditure budget for the next year of $5 million dollars. Of this amount, $3 million dollars is already committed as spending for capital assets that have already been acquired and are in place. The remaining $2 million dollars is available for new assets and for new projects or programs. Worthwhile Hospital typically divides the available capital expenditure funds into monies available for inpatient purposes and monies available for outpatient purposes. This year the split is proposed to be 50-50. The hospital's CFO is also proposing that a scoring system be used to evaluate this year's proposals. She has set up a scoring system that allows a maximum of five points. Thus the low is a score of one point and the high is a score of five points. In addition to the points earned by a funding proposal, the CFO will allow one "bonus point" for upgrading existing equipment and one "bonus point" for funding expansion of existing programs. Jody Smith,…Sharon Lee operates a popular summer camp for elementary school children. Projections for the current year are as follows: Sales revenue $8,340,000 Operating income Average assets $739,250 $4,208,000 The camp's weighted-average cost of capital is 10%, and Sharon requires that all new investments generate a return on investment of at least 15%. The camp's current tax rate is 30%. At last week's advisory board meeting, Sharon told the board that she had up to $70,000 to invest in new facilities at the camp and asked them to recommend some projects. Today the board's president presented Sharon with the following list of three potential investments to improve the camp facilities. Swimming Playground $ 2,470 Pool Gym $3,910 Incremental operating income $5,760 Average total assets 19,000 32,000 23,000 (a) Your answer is partially correct. Calculate the return on investment, residual income, and economic value added for each of the three projects. (Enter negative amounts using either a…
- The Fleming Manufacturing Company is considering a new investment. Financial projections for the investment are tabulated below. The corporate tax rate is 21 percent. Assume all sales revenue is received in cash, all operating costs and income taxes are paid in cash, and all cash flows occur at the end of the year. All net working capital is recovered at the end of the project. Year 0 Year 1 Year 2 Year 3 Year 4 Investment $ 35,000 Sales revenue $ 18,000 $ 18,500 $ 19,000 $ 16,000 Operating costs 3,800 3,900 4,000 3,200 Depreciation 8,750 8,750 8,750 8,750 Net working capital spending 410 460 510 410 ? a. Compute the incremental net income of the investment for each year. (Do not round intermediate calculations.) b. Compute the incremental cash flows of the investment for each year. (Do not round intermediate calculations. A negative answer should be indicated by a minus sign.) c. Suppose the appropriate discount rate is 11 percent. What is the NPV of the project?The Fleming Manufacturing Company is considering a new investment. Financial projections for the investment are tabulated below. The corporate tax rate is 23 percent. Assume all sales revenue is received in cash, all operating costs and income taxes are paid in cash, and all cash flows occur at the end of the year. All net working capital is recovered at the end of the project. Year 0 Year 1 Year 2 Year 3 Year 4 Investment $ 27,000 Sales revenue $ 14,000 $ 14,500 $ 15,000 $ 12,000 Operating costs 3,000 3,100 3,200 2,400 Depreciation 6,750 6,750 6,750 6,750 Net working capital spending 330 380 430 330 ? a. Compute the incremental net income of the investment for each year. (Do not round intermediate calculations.)MaxiCare Corporation, a not-for-profit organization, specializes in health care for senior citizens. Management is considering whether to expand operations by opening a new chain of care centers in the inner city of large metropolitan areas. For a new facility, initial cash outlays for lease, renovations, net working capital, training, and other costs are expected to be about $16 million. The corporation expects the cash inflows of each new facility in its first year of operation to equal the initial investment outlay for the facility. Net cash inflows are expected to increase to $2.5 million in each of years 2 and 3; $2.5 million in year 4; and $3.0 million in each of years 5 through 10. The lease agreement for the facility will expire at the end of year 10, and MaxiCare expects the cost to close a facility will pretty much exhaust all cash proceeds from the disposal. Cost of capital for MaxiCare is estimated as 12%. Assume that all cash flows occur at year end. Required: 1. Compute…