You are given the following information for Young Company. As of year 1, the company's...
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You are given the following information for Young Company. As of year 1, the company's book value is $80,000 and its cost of capital is 15%. Sales Operating expenses Depreciation Net income Year 1 Year 2 Year 3 Year 4 Year 5 S150,000 S163.000 $171.000 $177,000 S188.000 ($115.000) ($123.500) ($131.000) ($135,300) ($146,735) {$12.000) ($13.100) ($14.300) ($14.900) ($15.300) $23.000 $26.400 $25.700 $26.800 $25.965 Dividends $6,500 $5.500 $5.800 58.200 $6.504 Expected book value $80,000 596.500 S114.300 $147.300 $173.100 Expected ROCE 28.75" 26,34 24.57 32.89". 22.00 Note: Dividends for year 6 and beyond are expected to remain at year 5 level. What are the Residual Earnings of the Company for year 5
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