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

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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

Khushboo · Accepted Answer

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,

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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