Residual Income = | Net Operating Income - (Minimum Required Return x Cost of Investments) | |
= | $ 600000 - (8% x $ 1950000) | |
= | $ 444,000.00 |
Consider the following data from two divisions of a company. P and Q. Divisional Sales Operating...
Consider the following data from two divisions of a company, P and Q: Divisional P Q Sales $ 1,000,000 $ 1,700,000 Operating Income $ 600,000 $ 680,000 Investment $ 1,700,000 $ 2,040,000 If the minimum rate of return is 10%, what is Division P's residual income (RI)? Multiple Choice $430,000. $770,000. $830,000. $940,000. $1,640,000.
Consider the following data from two divisions of a company, P and Q: Divisional Sales Operating Income Investment P $ 792,000 $ 526,500 $ 360,000 $ 351,000 $ 4,500,000 $3,900,000 If both divisions were presented with an opportunity to invest in a project that is estimated to achieve an ROI of 8%, what will the units likely decide?
Consider the following data for three divisions of a company, X, Y, and Z: Divisional: Sales Operating Income Investment in assets $1,318,000 $947,000 $5,411,000 193,000 109,500 334,700 476,700 435,500 4,500,200 The return on investment (ROI) for Division X is: Multiple Choice 0 74% 11.6% 0 25.1% 0
Consider the following data for three divisions of a company, X, Y, and Z: Divisional: Sales Operating Income Investment in assets $1,468,000 $864,000 $4,601,000 219,400 181,400 233,700 560,500 747,300 2,307,300 The asset turnover (AT) for Division X is (rounded): Multiple Choice 0 0 0 0 0
Consider the following data for three divisions of a company, X, Y, and Z: Divisional: X Y Z Sales $ 1,318,000 $ 947,000 $ 5,411,000 Operating Income 193,000 109,500 334,700 Investment in assets 476,700 435,500 4,500,200 The return on investment (ROI) for Division X is: Multiple Choice 7.4%. 11.6%. 25.1%. 31.3%. 40.5%.
Consider the following data for three divisions of a company, X, Y, and Z: Divisional: X Y Z Sales $ 1,494,000 $ 827,000 $ 4,912,000 Operating Income 180,200 49,500 247,600 Investment in assets 511,500 224,200 2,345,800 The return on sales (ROS) for Division Z is: Multiple Choice 5.0%. 10.6%. 6.0%. 12.1%. 22.1%.
Consider the following data for three divisions of a company, X, Y, and Z: Divisional: X Y Z Sales $ 1,398,000 $ 840,000 $ 4,452,000 Operating Income 159,700 99,300 218,600 Investment in assets 336,700 393,800 2,742,700 The asset turnover (AT) for Division Y is calculated to be (rounded): Multiple Choice 2.28. 2.33. 2.13. 4.15. 2.92.
Consider the following data (in millions) from Trident Financial Inc., which has two main divisions, mortgage loans and consumer loans Average total assets Operating income Return on investment (ROI) Mortgage Loans $ 2,000 $ 400 208 Consumer Loans $ 20,000 $ 2,500 12.5% Required: 1. Based on ROI, which division is more successful? O Mortgage loans O Consumer loans 2. Trident uses residual income (RI) as a measure of the financial performance of its divisions. What is the RI for...
Consider the following data (in millions) from Trident Financial Inc., which has two main divisions, mortgage loans and consumer loans: Mortgage Loans Consumer Loans Average total assets $ 1,100 $ 21,250 Operating income $ 242 $ 2,550 Return on investment (ROI) 22.00 % 12.00 % Required: 1. Based on ROI, which division is more successful? Mortgage loans Consumer loans 2. Trident uses residual income (RI) as a measure of the financial performance of its divisions. What is the RI for...
Divisional Performance Analysis and Evaluation Divisional Performance Analysis and Evaluation The vice president of operations of Recycling Industries is evaluating the performance of two divisions organized as investment centers. Invested assets and condensed income statement data for the past year for each division are as follows: Business Division Consumer Division $42,800,000 Sales Cost of goods sold Operating expenses Invested assets 23,500,000 11,424,800 34,240,000 $56,000,000 30,500,000 14,300,000 70,000,000 Required: 1. Prepare condensed divisional income statements for the year ended December 31,...