Homework Answers
Present ROI = 800000/6400000 = 12.50%
Proposed ROI = 812000/6520000 = 12.45%
So answer is a) it will decrease to 12.45%
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Bajalia Company compiled the following information for the year: Average operating assets Controllable margin $6,400,000 $...
Just comparing 10) The current controllable margin for Stom Division is S124,000. Its current operating assets...
Just comparing
10) The current controllable margin for Stom Division is S124,000. Its current operating assets are $400,000. The division is considering purchasing equipment for $120,000 that will increase annual controllable margin by an estimated S20,000. If the equipment is purchased, what will happen to the return on investment for Stom Division? a. b. C. d. An increase of 16.1% A decrease of 13.3% A decrease of 3.3% A decrease of 7.2%
Margin, Turnover, Return on Investment, Average Operating Assets Elway Company provided the following income statement for...
Margin, Turnover, Return on Investment, Average Operating Assets Elway Company provided the following income statement for the last year: Sales $893,070,000 Less: Variable expenses 546,442,000 Contribution margin $346,628,000 Less: Fixed expenses 198,614,000 Operating income $148,014,000 At the beginning of last year, Elway had $38,632,000 in operating assets. At the end of the year, Elway had 541,363,000 in operating assets. Required: 1. Compute average operating assets. 2. Compute the margin (as a percent) and turnover ratios for last year. If required,...
Pina, Inc. reports the following financial information. Average operating assets $2,948,200 Controllable margin $648,604 Minimum rate...
Pina, Inc. reports the following financial information. Average operating assets $2,948,200 Controllable margin $648,604 Minimum rate of return Compute the return on investment and the residual income. Return on investment Residual income
ABC Company operates two divisions with the following operating information for the month of May: Division...
ABC Company operates two divisions with the following operating
information for the month of May:
Division 1: sales, $120,000; operating income, $36,000; operating
assets, $300,000.
Division 2: sales, $80,000; operating income, $40,000; operating
assets, $400,000.
ABC Company expects a minimum return of 10% should be earned from
all investments.
Required:
a. Prepare ABC Company’s ROI analysis using the DuPont
model for each division. (Round Turnover rate answers to
one decimal place.)
Division 1 Division 2 DuPont Performance Analysis: Revenues Operating...
Calculating Average Operating Assets, Margin, Turnover, Return on Investment (ROI) Forchen, Inc., provided the following information...
Calculating Average Operating Assets, Margin, Turnover, Return on Investment (ROI) Forchen, Inc., provided the following information for two of its divisions for last year: Small Appliances Cleaning Products Division Division Sales $34,670,000 $31,320,000 Operating income 2,773,600 1,252,800 Operating assets, January 1 6,394,000 5,600,000 Operating assets, December 31 7,474,000 6,000,000 Required: 1. For the Small Appliances Division, calculate: a. Average operating assets $ 6,934,000 b. Margin c. Turnover d. Return on investm nent (ROI) 2. For the Cleaning Products Division, calculate:...
Calculating Average Operating Assets, Margin, Turnover, Return on Investment (ROI) Forchen, Inc., provided the following information...
Calculating Average Operating Assets, Margin, Turnover, Return on Investment (ROI) Forchen, Inc., provided the following information for two of its divisions for last year: Small Appliances Cleaning Products Division Division Sales Operating income Operating assets, January 1 Operating assets, December 31 Required 1. For the Small Appliances Division, calculate a. Average operating assets6,934,000 b. Margirn C. Turnover d. Return on investment (ROI) 2. For the Cleaning Products Division, calculate: a. Average operating assets5,800,000 b. Margirn C. Turnover d. Return on...
Calculating Average Operating Assets, Margin, Turnover, Return on investment (RON) Forchen, in provided the following information...
Calculating Average Operating Assets, Margin, Turnover, Return on investment (RON) Forchen, in provided the following information for two of its divisions for last year Small Appliances Cleaning Products Division Division $34,670,000 $31,320,000 Operating come 2.77600 Operating assets, Lanuary 1 6,394,000 5,600,000 Operating assets, December 31 7,474,000 6,000,000 Required: 1. For the Small Appliances Division, calculate a. Average operating a s s Mar c. Turnover d. Return on investment (RON) 2. For the Cleaning Products D ona te: Round your turnover...
1. The Bash Company has two divisions—Office and Home . The divisions have the following revenues...
1. The Bash Company has two divisions—Office and Home . The divisions have the following revenues and expenses: Office Home Sales 800,000 900,000 Variable costs (280,000) (200,000) Direct fixed costs (430,000) (320,000) Allocated corporate costs (120,000) (250.000) Net income (loss) (30,000) 130,000 The management at Bash is pondering the elimination of the Office Division. If the Office Division were eliminated, its direct fixed costs could be avoided, but its total corporate costs would not be affected. Given these data, the...
1. The Bash Company has two divisions—Office and Home . The divisions have the following revenues and expenses: Office...
1. The Bash Company has two divisions—Office and Home . The divisions have the following revenues and expenses: Office Home Sales 800,000 900,000 Variable costs (280,000) (200,000) Direct fixed costs (430,000) (320,000) Allocated corporate costs (120,000) (250.000) Net income (loss) (30,000) 130,000 The management at Bash is pondering the elimination of the Office Division. If the Office Division were eliminated, its direct fixed costs could be avoided, but its total corporate costs would not be affected. Given these data, the...
1. The Bash Company has two divisions—Office and Home . The divisions have the following revenues and expenses: Office...
1. The Bash Company has two divisions—Office and Home . The divisions have the following revenues and expenses: Office Home Sales 800,000 900,000 Variable costs (280,000) (200,000) Direct fixed costs (430,000) (320,000) Allocated corporate costs (120,000) (250.000) Net income (loss) (30,000) 130,000 The management at Bash is pondering the elimination of the Office Division. If the Office Division were eliminated, its direct fixed costs could be avoided, but its total corporate costs would not be affected. Given these data, the...
Just comparing
10) The current controllable margin for Stom Division is S124,000. Its current operating assets are $400,000. The division is considering purchasing equipment for $120,000 that will increase annual controllable margin by an estimated S20,000. If the equipment is purchased, what will happen to the return on investment for Stom Division? a. b. C. d. An increase of 16.1% A decrease of 13.3% A decrease of 3.3% A decrease of 7.2%
Margin, Turnover, Return on Investment, Average Operating Assets Elway Company provided the following income statement for the last year: Sales $893,070,000 Less: Variable expenses 546,442,000 Contribution margin $346,628,000 Less: Fixed expenses 198,614,000 Operating income $148,014,000 At the beginning of last year, Elway had $38,632,000 in operating assets. At the end of the year, Elway had 541,363,000 in operating assets. Required: 1. Compute average operating assets. 2. Compute the margin (as a percent) and turnover ratios for last year. If required,...
Pina, Inc. reports the following financial information. Average operating assets $2,948,200 Controllable margin $648,604 Minimum rate of return Compute the return on investment and the residual income. Return on investment Residual income
ABC Company operates two divisions with the following operating
information for the month of May:
Division 1: sales, $120,000; operating income, $36,000; operating
assets, $300,000.
Division 2: sales, $80,000; operating income, $40,000; operating
assets, $400,000.
ABC Company expects a minimum return of 10% should be earned from
all investments.
Required:
a. Prepare ABC Company’s ROI analysis using the DuPont
model for each division. (Round Turnover rate answers to
one decimal place.)
Division 1 Division 2 DuPont Performance Analysis: Revenues Operating...
Calculating Average Operating Assets, Margin, Turnover, Return on Investment (ROI) Forchen, Inc., provided the following information for two of its divisions for last year: Small Appliances Cleaning Products Division Division Sales $34,670,000 $31,320,000 Operating income 2,773,600 1,252,800 Operating assets, January 1 6,394,000 5,600,000 Operating assets, December 31 7,474,000 6,000,000 Required: 1. For the Small Appliances Division, calculate: a. Average operating assets $ 6,934,000 b. Margin c. Turnover d. Return on investm nent (ROI) 2. For the Cleaning Products Division, calculate:...
Calculating Average Operating Assets, Margin, Turnover, Return on Investment (ROI) Forchen, Inc., provided the following information for two of its divisions for last year: Small Appliances Cleaning Products Division Division Sales Operating income Operating assets, January 1 Operating assets, December 31 Required 1. For the Small Appliances Division, calculate a. Average operating assets6,934,000 b. Margirn C. Turnover d. Return on investment (ROI) 2. For the Cleaning Products Division, calculate: a. Average operating assets5,800,000 b. Margirn C. Turnover d. Return on...
Calculating Average Operating Assets, Margin, Turnover, Return on investment (RON) Forchen, in provided the following information for two of its divisions for last year Small Appliances Cleaning Products Division Division $34,670,000 $31,320,000 Operating come 2.77600 Operating assets, Lanuary 1 6,394,000 5,600,000 Operating assets, December 31 7,474,000 6,000,000 Required: 1. For the Small Appliances Division, calculate a. Average operating a s s Mar c. Turnover d. Return on investment (RON) 2. For the Cleaning Products D ona te: Round your turnover...
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