The Board of Directors for Merck has decided to invest 5% of 2018’s retained earnings at the beginning of 2019 for a new pill press production line. The press will be depreciated over seven years with...

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The Board of Directors for Merck has decided to invest 5% of 2018’s retained earnings at the beginning of 2019 for a new pill press production line. The press will be depreciated over seven years with no salvage value. Total revenue is expected to increase by 3%. Merck has budgeted for a 30% income tax rate and a net income from noncontrolling interests of $15 million. All other numbers not related to this change have been budgeted to remain constant with 2018. What is the expected Return on Assets Ratio for 2019? ( The question takes to download the Merck SEC Filings which can be sent via PDF

Answered Same DayOct 25, 2021

Answer To: The Board of Directors for Merck has decided to invest 5% of 2018’s retained earnings at the...

Khushboo answered on Oct 27 2021
152 Votes
Sheet1
            Calculation of return on assets for year 2019
            Net income (Note A)    6,751
            Total assets (Note B)    89,388
            Return on assets (Net income/ total assets)    7.55%
            Note A: Calculation of net income for year 2019
            Particulars    Amount ($ million)    Remarks
            Revenue (a)    43,563    Refer note-1
            Cost, Expenses and Other
            Cost of sales    13509    Will remain constant
            Selling, general and administrative    10102    Will remain constant
            Research and development    9752    Will...
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