Homework Answers
Net operating income = 350000*10% = 35000
a) New rate of return = (35000+29400)/350000 = 18.40%
Return on investment = 18.40%
b) New ROI = Net operating income/Average operating assets
.184 = 35000/X
X(average operating assets) = 190217
Operating assets must decrease by (350000-190217) = 159783
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Exercise 15-13 Return on investment LO 15-7 Benson Company calculated its return on investment as 10...
Franklin Company calculated its return on investment as 10 percent. Sales are now $370,000, and the...
Franklin Company calculated its return on investment as 10
percent. Sales are now $370,000, and the amount of total operating
assets is $390,000.
Required
If expenses are reduced by $31,200 and sales remain unchanged,
what return on investment will result? (Round your answer
to 2 decimal places. (i.e., .2345 should be entered as
23.45).)
If both sales and expenses cannot be changed, what change in the
amount of operating assets is required to achieve the same result?
(Do not round...
Solomon Company calculated its return on investment as 10 percent. Sales are now $440,000, and the amount of total...
Solomon Company calculated its return on investment as 10 percent. Sales are now $440,000, and the amount of total operating assets is $460,000 Required a. If expenses are reduced by $43,700 and sales remain unchanged, what return on investment will result? (Round your answer to 2 decimal places. (ie...2345 should be entered as 23.45).) b. If both sales and expenses cannot be changed, what change in the amount of operating assets is required to achieve the same result? (Do not...
Perez Company calculated its return on investment as 10 percent. Sales are now $410,000, and the...
Perez Company calculated its return on investment as 10 percent. Sales are now $410,000, and the amount of total operating assets is $430,000. Required a. If expenses are reduced by $38,700 and sales remain unchanged, what return on investment will result? (Round your answer to 2 decimal places. (i.e., 0.2345 should be entered as 23.45).) b. If both sales and expenses cannot be changed, what change in the amount of operating assets is required to achieve the same result? (Do...
Finch Company calculated its return on investment as 10 percent. Sales are now $360,000, and the...
Finch Company calculated its return on investment as 10 percent. Sales are now $360,000, and the amount of total operating assets is $380,000 Required a. If expenses are reduced by $32,300 and sales remain unchanged, what return on investment will result? (Round your answer to 2 decimal places. (.e., 0.2345 should be entered as 23.45).) b. If both sales and expenses cannot be changed, what change in the amount of operating assets is required to achieve the same result? (Do...
Exercise 15-16 Return on investment and residual income LO 15-6, 15-7 Required Supply the missing information...
Exercise 15-16 Return on investment and residual income LO 15-6, 15-7 Required Supply the missing information in the following table for Perez Company. (Do not round intermediate calculations. Round "ROI" answer to 2 decimal places. (i., .2345 should be entered as 23.45).) 365,400 Sales $ ROI Operating assets Operating income Turnover Residual income 2.1 13 % Operating profit margin Desired rate of return 18 %
Problem 15-22 Return on investment LO 15-6 Gibson Corporation’s balance sheet indicates that the company has...
Problem 15-22 Return on investment LO 15-6
Gibson Corporation’s balance sheet indicates that the company
has $580,000 invested in operating assets. During 2018, Gibson
earned operating income of $67,280 on $1,160,000 of sales.
Required
Compute Gibson’s profit margin for 2018.
Compute Gibson’s turnover for 2018.
Compute Gibson’s return on investment for 2018.
Recompute Gibson’s ROI under each of the following independent
assumptions:
(1) Sales increase from $1,160,000 to $1,392,000, thereby resulting
in an increase in operating income from $67,280 to...
Problem 15-22 Return on investment LO 15-6 Gibson Corporation’s balance sheet indicates that the company has $580,000 in...
Problem 15-22 Return on investment LO 15-6
Gibson Corporation’s balance sheet indicates that the company
has $580,000 invested in operating assets. During 2018, Gibson
earned operating income of $67,280 on $1,160,000 of sales.
Required
Compute Gibson’s profit margin for 2018.
Compute Gibson’s turnover for 2018.
Compute Gibson’s return on investment for 2018.
Recompute Gibson’s ROI under each of the following independent
assumptions:
(1) Sales increase from $1,160,000 to $1,392,000, thereby resulting
in an increase in operating income from $67,280 to...
! Required information Exercise 10-11 Effects of Changes in Profits and Assets on Return on Investment...
! Required information Exercise 10-11 Effects of Changes in Profits and Assets on Return on Investment (ROI) [LO10-1] [The following information applies to the questions displayed below.] Fitness Fanatics is a regional chain of health clubs. The managers of the clubs, who have authority to make investments as needed, are evaluated based largely on return on investment (ROI). The company's Springfield Club reported the following results for the past year: $ 790,000 Sales Net operating income Average operating assets 18,960...
Exercise 14-2 Preparing a sales budget LO 14-2 Benson Company, which expects to start operations on...
Exercise 14-2 Preparing a sales budget LO 14-2
Benson Company, which expects to start operations on January 1,
2018, will sell digital cameras in shopping malls. Benson has
budgeted sales as indicated in the following table. The company
expects a 11 percent increase in sales per month for February and
March. The ratio of cash sales to sales on account will remain
stable from January through March.
Required
Complete the sales budget by filling in the missing
amounts.
Determine the...
Exercise 14-2 Preparing a sales budget LO 14-2 Benson Company, which expects to start operations on...
Exercise 14-2 Preparing a sales budget LO 14-2
Benson Company, which expects to start operations on January 1,
2018, will sell digital cameras in shopping malls. Benson has
budgeted sales as indicated in the following table. The company
expects a 11 percent increase in sales per month for February and
March. The ratio of cash sales to sales on account will remain
stable from January through March.
Required
Complete the sales budget by filling in the missing
amounts.
Determine the...
Franklin Company calculated its return on investment as 10
percent. Sales are now $370,000, and the amount of total operating
assets is $390,000.
Required
If expenses are reduced by $31,200 and sales remain unchanged,
what return on investment will result? (Round your answer
to 2 decimal places. (i.e., .2345 should be entered as
23.45).)
If both sales and expenses cannot be changed, what change in the
amount of operating assets is required to achieve the same result?
(Do not round...
Solomon Company calculated its return on investment as 10 percent. Sales are now $440,000, and the amount of total operating assets is $460,000 Required a. If expenses are reduced by $43,700 and sales remain unchanged, what return on investment will result? (Round your answer to 2 decimal places. (ie...2345 should be entered as 23.45).) b. If both sales and expenses cannot be changed, what change in the amount of operating assets is required to achieve the same result? (Do not...
Perez Company calculated its return on investment as 10 percent. Sales are now $410,000, and the amount of total operating assets is $430,000. Required a. If expenses are reduced by $38,700 and sales remain unchanged, what return on investment will result? (Round your answer to 2 decimal places. (i.e., 0.2345 should be entered as 23.45).) b. If both sales and expenses cannot be changed, what change in the amount of operating assets is required to achieve the same result? (Do...
Finch Company calculated its return on investment as 10 percent. Sales are now $360,000, and the amount of total operating assets is $380,000 Required a. If expenses are reduced by $32,300 and sales remain unchanged, what return on investment will result? (Round your answer to 2 decimal places. (.e., 0.2345 should be entered as 23.45).) b. If both sales and expenses cannot be changed, what change in the amount of operating assets is required to achieve the same result? (Do...
Exercise 15-16 Return on investment and residual income LO 15-6, 15-7 Required Supply the missing information in the following table for Perez Company. (Do not round intermediate calculations. Round "ROI" answer to 2 decimal places. (i., .2345 should be entered as 23.45).) 365,400 Sales $ ROI Operating assets Operating income Turnover Residual income 2.1 13 % Operating profit margin Desired rate of return 18 %
Problem 15-22 Return on investment LO 15-6
Gibson Corporation’s balance sheet indicates that the company
has $580,000 invested in operating assets. During 2018, Gibson
earned operating income of $67,280 on $1,160,000 of sales.
Required
Compute Gibson’s profit margin for 2018.
Compute Gibson’s turnover for 2018.
Compute Gibson’s return on investment for 2018.
Recompute Gibson’s ROI under each of the following independent
assumptions:
(1) Sales increase from $1,160,000 to $1,392,000, thereby resulting
in an increase in operating income from $67,280 to...
Problem 15-22 Return on investment LO 15-6
Gibson Corporation’s balance sheet indicates that the company
has $580,000 invested in operating assets. During 2018, Gibson
earned operating income of $67,280 on $1,160,000 of sales.
Required
Compute Gibson’s profit margin for 2018.
Compute Gibson’s turnover for 2018.
Compute Gibson’s return on investment for 2018.
Recompute Gibson’s ROI under each of the following independent
assumptions:
(1) Sales increase from $1,160,000 to $1,392,000, thereby resulting
in an increase in operating income from $67,280 to...
! Required information Exercise 10-11 Effects of Changes in Profits and Assets on Return on Investment (ROI) [LO10-1] [The following information applies to the questions displayed below.] Fitness Fanatics is a regional chain of health clubs. The managers of the clubs, who have authority to make investments as needed, are evaluated based largely on return on investment (ROI). The company's Springfield Club reported the following results for the past year: $ 790,000 Sales Net operating income Average operating assets 18,960...
Exercise 14-2 Preparing a sales budget LO 14-2
Benson Company, which expects to start operations on January 1,
2018, will sell digital cameras in shopping malls. Benson has
budgeted sales as indicated in the following table. The company
expects a 11 percent increase in sales per month for February and
March. The ratio of cash sales to sales on account will remain
stable from January through March.
Required
Complete the sales budget by filling in the missing
amounts.
Determine the...
Exercise 14-2 Preparing a sales budget LO 14-2
Benson Company, which expects to start operations on January 1,
2018, will sell digital cameras in shopping malls. Benson has
budgeted sales as indicated in the following table. The company
expects a 11 percent increase in sales per month for February and
March. The ratio of cash sales to sales on account will remain
stable from January through March.
Required
Complete the sales budget by filling in the missing
amounts.
Determine the...
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