I’m working on a accounting writing question and need an explanation and answer to help me learn.
-What is an income statement and why is it used?
Why would you compare from one year to the next?
-Was the decision to invest additional assets in the company successful? Explain.
-Assuming an 8% cost of capital, calculate the residual income for each year. Explain how this compares to your findings in the previous question.
-Based on the
increase/decrease of the investment does it appear the investment was successful?