Other BEC Stuff

Question 1

retrun on investment (ROI)

Answer 1

Net income / investment

note: this is always a %

Question 2

Residual income (RI)

Answer 2

Net income / (investment x hurdle rate)

*Hurdle rate can be required rate of return

Question 3

What happens to the Cost pools AND allocation bases in ABC method?

Answer 3

cost pools = increase

allocations = increase

Question 4

Cost of factoring

Answer 4

fee x monthly revnue x 12 
Ar for 1 month times rate
subrtract savings
= amount saved
Divided by Amt advance