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Sagot :
The profits of the Tinsley Plastics to manufactures plastic bottles is $162,000.
What is profit?
A profit is defined as the monetary profit. It is particularly the difference between the amount earned, and the amount spent on purchasing, operating, or creating anything.
The formula of profit is:
[tex]\text{Profits} =\text{ NBV} *\times \text{Required Rate of Return + Residual Income (RI)}[/tex]
Computation of profit:
According to the given information,
Net Book Value (NBV) = $510,000,
Rate of Return = 12%
Residual Income (RI) = $101,000
Now, apply the given values in the formal of profit,
[tex]\text{Profits} =\text{ NBV} *\times \text{Required Rate of Return + Residual Income (RI)}\\\\\text{Profits} = \$510,000 \times 12\% + \$101,000\\\\\text{Profits} =\$162,000[/tex]
Therefore, the firm's profits must be $162,000.
Learn more about the profits, refer to:
https://brainly.com/question/15036999
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