The income statement comparison for Forklift Material Handling
shows the income statement for the current and prior year.
A. Determine the operating income (loss)
(dollars) for each year. If required round final
answers to two decimal places.
B. Determine the operating income (loss)
(percentage) for each year. If required round final
answers to two decimal places.
c. The company made a strategic decision
to invest in additional assets in the current year. These amounts
are provided. Using the total assets amounts as the investment
base, calculate the return on investment. Was the decision to
invest additional assets in the company successful? If
required round final answers to two decimal places.
SuccessfulUnsuccessful
D. Assuming an 8% cost of capital,
calculate the residual income for each year. Do not
round intermediate computations and round final answers to nearest
whole dollar. For those boxes in which you must enter
subtractive or negative numbers use a minus sign.
The residual income related to the investment
increaseddecreased
in the current year. This
conflictsconfirms
with the ROI results. Management
shouldshould not
consider both methods in their analysis of the
investment.
The income statement comparison for Forklift Material Handling shows the income statement for the current and prior year
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