Homework Answers
Answer 8 Correct answer is Option $410,000
Margin = Net Operating Income / Sales 100 =
82,000/1,345,000
100 =
6.096654%
Turnover = Sales / Average operating asset = 1,345,000 / Avg. Assets
Return On Investment = Margin Turnover = Net
Income / Sales
Sales/ Average
Assets
20% = Net Income / Average Assets
0.2 = 82,000 /Avg. Assets
Avg. Assets = 82,000/0.2 = $410,000
Answer 9. None of the answer is correct.
Margin = 0.015 or ROI = 15%;
ROI = Net Income / Average Assets
15% = 418,000/ Average Assets
Avg. Assets =418,000/ 0.15 = $2,786,667
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The following information pertains to the three divisions of Yang Limited: Division C $1,345,000 $82,000 Division...
Division C $1,345,000 $82,000 The following information pertains to the three divisions of Yang Limited: Division...
Division C $1,345,000 $82,000 The following information pertains to the three divisions of Yang Limited: Division A Division B Sales ? ? Net operating $48,000 418,000 income Average operating $420,000 ? assets Return on 15% investment Margin 0.2 0.015 Turnover 2.1 Target ROI 17% 14% ? 20% ? 8% 8. What are the average operating assets for Division C? $95,000 $410,000 $82,000 $420,000 What are the average operating assets for Division B? $125,000 $120,000 $18,000 $420,000
Division C $1,345,000 $82,000 The following information pertains to the three divisions of Yang Limited: Division...
Division C $1,345,000 $82,000 The following information pertains to the three divisions of Yang Limited: Division A Division B Sales ? Net operating $48,000 418,000 income Average operating $420,000 assets Return on 15% investment Margin 0.2 0.015 Turnover 2.1 Target ROI 17% 14% 20% 8% What are the average operating assets for Division C? $95,000 $410,000 $82,000 $420,000 What are the average operating assets for Division B? $125,000 $120,000 $18,000 $420,000
The following information pertains to the three divisions of Yang Company: Division A Division B Division...
The following information pertains to the three divisions of Yang Company: Division A Division B Division C Sales ? ? $1,345,000 Net operating income $48,000 $18,000 $82,000 Average operating assets $420,000 ? ? Return on investment ? 15% 20% Margin 0.2 0.015 ? Turnover 2.1 ? ? Target ROI 17% 14% 8% What is the turnover for Division C? a.6.670 b.3.28 c.1.500 d.0.20
13. The following information pertains to the three divisions of Marlow Company: Division Z Division Y...
13. The following information pertains to the three divisions of Marlow Company: Division Z Division Y Division X $1,250,000 $75,000 Sales ? ? Net operating income $36,000 $25,000 Average operating $300,000 ? ? assets Return on ? 20% 15% investment Margin 0.10 0.05 ? Turnover 1.2 ? ? Target ROI 15% 12% 10% What is the residual income for Division X? А. $36,000 $45,000 $(9,000) $(36,000) В. С. D. The Auto Division of a department store had a net operating...
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...
Selected sales and operating data for three divisions of different structural engineering firms are given as follows: Division A Division B Division C $6,100,000 $10,100,000 $9,200,000 $1,525,000 $ 5...
Selected sales and operating data for three divisions of different structural engineering firms are given as follows: Division A Division B Division C $6,100,000 $10,100,000 $9,200,000 $1,525,000 $ 5,050,000 $2,300,000 Sales Average operating assetS Net operating income $ 317,200 $ 929,200 $ 225,400 Minimum required ratee of return 15.00% 18.40% 12.00% Required 1. Compute the return on investment (ROI) for each division using the formula stated in terms of margin and turnover 2. Compute the residual income (loss) for each...
Selected sales and operating data for three divisions of different structural engineering firms are given as follows: Division A Division B Division C Sales $ 12,920,000 $ 28,920,000 $ 26,150,...
Selected sales and operating data for three divisions of
different structural engineering firms are given as follows:
Division A
Division B
Division C
Sales
$
12,920,000
$
28,920,000
$
26,150,000
Average operating assets
$
3,230,000
$
7,230,000
$
5,230,000
Net operating income
$
516,800
$
462,720
$
758,350
Minimum required rate of return
7.00
%
7.50
%
14.50
%
Required:
1. Compute the return on investment (ROI) for each division
using the formula stated in terms of margin and turnover....
Selected sales and operating data for three divisions of different structural engineering firms are Division A...
Selected sales and operating data for three divisions of different structural engineering firms are Division A $7,300,000 $ 1,460,000 467,200 27.008 Division B Division c Sales $ 11,300,000 $ 5,650,000 $ 1,175,200 $10,400,000 $2,080,000 Average operating assets Net operating income Minimum required rate of return 379,600 20.80% 24.00% Required: 1. Compute the return on investment (ROI) for each division using the formula stated in terms of 2. Compute the residual income (loss) for each division. B. Assume that each division...
Walton Cough Drops operates two divisions. The following information pertains to each division for 2018: Sales...
Walton Cough Drops operates two divisions. The following information pertains to each division for 2018: Sales Operating income Average operating assets Company's desired rate of return Division A $200,000 $ 16,400 $ 54,000 13% Division B $ 89,000 $ 8,900 $41,000 13% Required a. Compute each division's residual income. b. Which division increased the company's profitability more? Residual Income a. Division A Division B b. The division that increased the company's profitability more is
The Labrador Falls Company has three divisions: A Division, B Division, and C Division. A B...
The Labrador Falls Company has three divisions: A Division, B Division, and C Division. A B C Sales $ 323,000 $ 543,000 ? Net operating income 61,500 ? $ 24,300 Residual income ? 37,500 14,700 Average Division Assets ? ? 81,500 Cost of Capital 12 % 10 % ? Profit Margin 20 % 4 % ? Asset Turnover ? 1 ? Return on investment 15 % ? ? What was A Division's residual income last year?
Division C $1,345,000 $82,000 The following information pertains to the three divisions of Yang Limited: Division A Division B Sales ? ? Net operating $48,000 418,000 income Average operating $420,000 ? assets Return on 15% investment Margin 0.2 0.015 Turnover 2.1 Target ROI 17% 14% ? 20% ? 8% 8. What are the average operating assets for Division C? $95,000 $410,000 $82,000 $420,000 What are the average operating assets for Division B? $125,000 $120,000 $18,000 $420,000
Division C $1,345,000 $82,000 The following information pertains to the three divisions of Yang Limited: Division A Division B Sales ? Net operating $48,000 418,000 income Average operating $420,000 assets Return on 15% investment Margin 0.2 0.015 Turnover 2.1 Target ROI 17% 14% 20% 8% What are the average operating assets for Division C? $95,000 $410,000 $82,000 $420,000 What are the average operating assets for Division B? $125,000 $120,000 $18,000 $420,000
13. The following information pertains to the three divisions of Marlow Company: Division Z Division Y Division X $1,250,000 $75,000 Sales ? ? Net operating income $36,000 $25,000 Average operating $300,000 ? ? assets Return on ? 20% 15% investment Margin 0.10 0.05 ? Turnover 1.2 ? ? Target ROI 15% 12% 10% What is the residual income for Division X? А. $36,000 $45,000 $(9,000) $(36,000) В. С. D. The Auto Division of a department store had a net operating...
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...
Selected sales and operating data for three divisions of different structural engineering firms are given as follows: Division A Division B Division C $6,100,000 $10,100,000 $9,200,000 $1,525,000 $ 5,050,000 $2,300,000 Sales Average operating assetS Net operating income $ 317,200 $ 929,200 $ 225,400 Minimum required ratee of return 15.00% 18.40% 12.00% Required 1. Compute the return on investment (ROI) for each division using the formula stated in terms of margin and turnover 2. Compute the residual income (loss) for each...
Selected sales and operating data for three divisions of
different structural engineering firms are given as follows:
Division A
Division B
Division C
Sales
$
12,920,000
$
28,920,000
$
26,150,000
Average operating assets
$
3,230,000
$
7,230,000
$
5,230,000
Net operating income
$
516,800
$
462,720
$
758,350
Minimum required rate of return
7.00
%
7.50
%
14.50
%
Required:
1. Compute the return on investment (ROI) for each division
using the formula stated in terms of margin and turnover....
Selected sales and operating data for three divisions of different structural engineering firms are Division A $7,300,000 $ 1,460,000 467,200 27.008 Division B Division c Sales $ 11,300,000 $ 5,650,000 $ 1,175,200 $10,400,000 $2,080,000 Average operating assets Net operating income Minimum required rate of return 379,600 20.80% 24.00% Required: 1. Compute the return on investment (ROI) for each division using the formula stated in terms of 2. Compute the residual income (loss) for each division. B. Assume that each division...
Walton Cough Drops operates two divisions. The following information pertains to each division for 2018: Sales Operating income Average operating assets Company's desired rate of return Division A $200,000 $ 16,400 $ 54,000 13% Division B $ 89,000 $ 8,900 $41,000 13% Required a. Compute each division's residual income. b. Which division increased the company's profitability more? Residual Income a. Division A Division B b. The division that increased the company's profitability more is
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