HernandezA FINC300 7.xlsx (MGMT101)
American Public University System
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Management Accounting EXAM PACK 2021 - SUMMARIES/EXAMS/MEMOS/NOTES/MOCK EXAM It deals with the various aspects of manage accounting and related systems .
- Exam (elaborations) • 13 pages • 2021
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Management Accounting 
 
It deals with the various aspects of manage accounting and related systems .
-
Exam (elaborations) HernandezA-FINC300-7.xlsx
- Exam (elaborations) • 2 pages • 2021
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- $8.49
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(a) What are the values for divisions A and B if you assume, for calculation purposes, that operating income is constant to perpetuity? 							 
							 
	V A = 50/0.15 = 333.3						 
	V B = 300/0.15 = 2000						 
							 
(b) The company pays out 50 and so finances its investments for 300. The company invests everything in division B at the same return on capital employed (30%). How much value is created?							 
							 
							 
	V A unchanged						 
	V B = 390/0.15 = 2600						 
							 ...
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