Anders Company provided the following information: Turnover 1.4 Average operating assets $120,000 Operating income $6,720 What...
Anders Company provided the following information:
|
Turnover |
1.4 |
|
Average operating assets |
$120,000 |
|
Operating income |
$6,720 |
What is margin?
c.Cannot be determined from the above information.
A company had WACC (weighted average cost of capital) equal to 8.96% If the company pays off mortgage bonds with an interest rate of 4% and issues an equal amount of new stock considered to be relatively risky by the market, which of the following is true?
a.residual income will increase.
b.WACC will decrease.
c.ROI will decrease.
d.WACC will increase.
Homework Answers
1. Sales = turnover*average operating assets
= 1.4*120000 = $168000
Margin operating income / sales
= 6720/ 168000
= 4%
2. WACC will increase.
Add Answer to:
Anders Company provided the following
information:
Turnover
1.4
Average operating assets
$120,000
Operating income
$6,720
What...
Anders Company provided the following information: Turnover 1.4 Average operating assets $120,000 Operating income $6,720 If...
Anders Company provided the following information: Turnover 1.4 Average operating assets $120,000 Operating income $6,720 If the imputed interest rate is 6%, what is Anders Company residual income for the year? a.$2,400 b.($2,400) c.$480 d.($480)
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,...
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 $786,640,000 Less: Variable expenses 543,024,000 Contribution margin $243,616,000 195,036,000 Less: Fixed expenses Operating income $48,580,000 At the beginning of last year, Elway had $38,624,000 in operating assets. At the end of the year, Elway had $41,371,000 in operating assets. Required: 1. Compute average operating assets. 2. Compute the margin (as a percent) and turnover ratios for last year. If required,...
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 $899,720,000 Less: Variable expenses 543,801,000 Contribution margin $355,919,000 Less: Fixed expenses 198,570,000 Operating income $157,349,000 At the beginning of last year, Elway had $38,640,000 in operating assets. At the end of the year, Elway had $41,390,000 in operating assets. Required: 1. Compute average operating assets. 2. Compute the margin (as a percent) and turnover ratios for last year. If required,...
Calculating Average Operating Assets, Margin, Turnover, Return on Investment (ROI) Forchen, Inc., provided the following information...
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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...
Bajalia Company compiled the following information for the year: Average operating assets Controllable margin $6,400,000 $...
Bajalia Company compiled the following information for the year: Average operating assets Controllable margin $6,400,000 $ 800,000 Bajalia's corporate office expects the division to earn a minimum return of 10%. If Bajalia buys a new machine costing $120,000 that is expected to generate additional controllable margin of $12,000, what happens to ROI? O It will decrease to 12.45%. It will be 10%. O It will increase to 12.69%. O It will be 12.5%.
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Calculating Average Operating Assets, Margin, Tumover, 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 $29,000,000 Operating income 2,773,600 1,160,000 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 b. Margin C. Turnover d. Return on investment (ROI) 2. For the Cleaning Products Division, calculate: a. Average operating...
The contribution format income statement for Huerra Company for last year is given below: Total Unit...
The contribution format income statement for Huerra Company for
last year is given below:
Total
Unit
Sales
$
992,000
$
49.60
Variable expenses
595,200
29.76
Contribution margin
396,800
19.84
Fixed expenses
312,800
15.64
Net operating income
84,000
4.20
Income taxes @ 40%
33,600
1.68
Net income
$
50,400
$
2.52
The company had average operating assets of $492,000 during the
year.
Required:
1. Compute the company’s return on investment (ROI) for the
period using the ROI formula stated in terms...
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,...
Margin, Turnover, Return on Investment, Average Operating Assets Elway Company provided the following income statement for the last year: Sales $786,640,000 Less: Variable expenses 543,024,000 Contribution margin $243,616,000 195,036,000 Less: Fixed expenses Operating income $48,580,000 At the beginning of last year, Elway had $38,624,000 in operating assets. At the end of the year, Elway had $41,371,000 in operating assets. Required: 1. Compute average operating assets. 2. Compute the margin (as a percent) and turnover ratios for last year. If required,...
Margin, Turnover, Return on Investment, Average Operating Assets Elway Company provided the following income statement for the last year: Sales $899,720,000 Less: Variable expenses 543,801,000 Contribution margin $355,919,000 Less: Fixed expenses 198,570,000 Operating income $157,349,000 At the beginning of last year, Elway had $38,640,000 in operating assets. At the end of the year, Elway had $41,390,000 in operating assets. Required: 1. Compute average operating assets. 2. Compute the margin (as a percent) and turnover ratios for last year. If required,...
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...
Bajalia Company compiled the following information for the year: Average operating assets Controllable margin $6,400,000 $ 800,000 Bajalia's corporate office expects the division to earn a minimum return of 10%. If Bajalia buys a new machine costing $120,000 that is expected to generate additional controllable margin of $12,000, what happens to ROI? O It will decrease to 12.45%. It will be 10%. O It will increase to 12.69%. O It will be 12.5%.
Calculating Average Operating Assets, Margin, Tumover, 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 $29,000,000 Operating income 2,773,600 1,160,000 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 b. Margin C. Turnover d. Return on investment (ROI) 2. For the Cleaning Products Division, calculate: a. Average operating...
The contribution format income statement for Huerra Company for
last year is given below:
Total
Unit
Sales
$
992,000
$
49.60
Variable expenses
595,200
29.76
Contribution margin
396,800
19.84
Fixed expenses
312,800
15.64
Net operating income
84,000
4.20
Income taxes @ 40%
33,600
1.68
Net income
$
50,400
$
2.52
The company had average operating assets of $492,000 during the
year.
Required:
1. Compute the company’s return on investment (ROI) for the
period using the ROI formula stated in terms...
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