This question appeared in the June 2015 exam.
A、division is considering investing in capital equipment costing $2.7m. The useful economic life of the equipment is expected to be 50 years, with no resale value at the end of the period. The forecast return on the initial investment is 15% per annum before depreciation. The division's cost of capital is 7%? What is the expected annual residual income of the initial investment?
A、$0
B、($270,000)
C、$162,000
D、$216,000
A、division is considering investing in capital equipment costing $2.7m. The useful economic life of the equipment is expected to be 50 years, with no resale value at the end of the period. The forecast return on the initial investment is 15% per annum before depreciation. The division's cost of capital is 7%? What is the expected annual residual income of the initial investment?
A、$0
B、($270,000)
C、$162,000
D、$216,000
【参考答案及解析】
Divisional profit before depreciation = $2.7m × 15% = $405,000 per year. Less depreciation = $2.7m × 1/50 = $54,000 per year Divisional profit after depreciation = $351,000 Imputed interest = $2.7m × 7% = $189,000 Residual income = $162,000
Divisional profit before depreciation = $2.7m × 15% = $405,000 per year. Less depreciation = $2.7m × 1/50 = $54,000 per year Divisional profit after depreciation = $351,000 Imputed interest = $2.7m × 7% = $189,000 Residual income = $162,000