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Other Fields Homework Help Accounting Topic started by: djnextlevel on Jan 29, 2023



Title: Major Corporation operates a wholesale electrical supply company with two locations. Each location ...
Post by: djnextlevel on Jan 29, 2023
Major Corporation operates a wholesale electrical supply company with two locations. Each location is evaluated as an investment center. Selected results from the latest year are as follows:

Location #1Location #2
Sales$600,000$800,000
Variable expenses460,000660,000
Direct fixed expenses100,00080,000
Average assets890,000780,000
Current liabilities120,000180,000
Required rate of return10%12%
Weighted average cost of capital8%6%
Tax rate24%28%

Required:

a.Calculate the residual income for Location #1.
b.Calculate the EVA for Location #2.


Title: Major Corporation operates a wholesale electrical supply company with two locations. Each location ...
Post by: jmoline2 on Jan 29, 2023
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