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?
Homework Answers
Residual income = Net operating income - Minimum operating income
Average operating assets = 61500*100/15 = 410000
Residual income A = 61500-(410000*12%) = 12300
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The Labrador Falls Company has three divisions: A Division, B
Division, and C Division.
A
B...
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 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...
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...
Wescott Company has three divisions: A, B, and C. The company has a hurdle rate of...
Wescott Company has three divisions: A, B, and C. The company has a hurdle rate of 8 percent. Selected operating data for the three divisions are as follows: Sales revenue Cost of goods sold Miscellaneous operating expenses Interest and taxes Average invested assets Division A Division B Division C $ 1,210,000 $ 1,281,000 $1,316,000 748, 000 941.00 Hui 956,000 83,000 71,000 72,000 67,000 60,000 60,000 11,587,000 2,823,600 4,640,000 Wescott is considering an expansion project in the upcoming year that will...
Wescott Company has three divisions: A, B, and C. The company has a hurdle rate of...
Wescott Company has three
divisions: A, B, and C. The company has a hurdle rate of 8 percent.
Selected operating data for the three divisions are as follows:
Wescott Company has three divisions: A, B, and C. The company has a hurdle rate of 8 percent. Selected operating data for the three divisions are as follows Division A Division B Division C Sales revenue Cost of goods sold Miscellaneous operating expenses Interest and taxes Average invested assets $ 1,280,000 $...
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...
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
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
Wescott Company has three divisions: A, B, and C. The company has a hurdle rate of...
Wescott Company has three divisions: A, B, and C. The company has a hurdle rate of 8 percent. Selected operating data for the three divisions are as follows: $ $ $ Sales revenue Cost of goods sold Miscellaneous operating expenses Interest and taxes Average invested assets Division A 1,280,000 791,000 69,000 53,000 9,165,000 Division B 1,015,000 745,000 57,000 46,000 2,165,000 Division C 1,008,000 732,000 58,000 46,000 3,562,000 Wescott is considering an expansion project in the upcoming year that will cost...
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 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...
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...
Wescott Company has three divisions: A, B, and C. The company has a hurdle rate of 8 percent. Selected operating data for the three divisions are as follows: Sales revenue Cost of goods sold Miscellaneous operating expenses Interest and taxes Average invested assets Division A Division B Division C $ 1,210,000 $ 1,281,000 $1,316,000 748, 000 941.00 Hui 956,000 83,000 71,000 72,000 67,000 60,000 60,000 11,587,000 2,823,600 4,640,000 Wescott is considering an expansion project in the upcoming year that will...
Wescott Company has three
divisions: A, B, and C. The company has a hurdle rate of 8 percent.
Selected operating data for the three divisions are as follows:
Wescott Company has three divisions: A, B, and C. The company has a hurdle rate of 8 percent. Selected operating data for the three divisions are as follows Division A Division B Division C Sales revenue Cost of goods sold Miscellaneous operating expenses Interest and taxes Average invested assets $ 1,280,000 $...
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...
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
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
Wescott Company has three divisions: A, B, and C. The company has a hurdle rate of 8 percent. Selected operating data for the three divisions are as follows: $ $ $ Sales revenue Cost of goods sold Miscellaneous operating expenses Interest and taxes Average invested assets Division A 1,280,000 791,000 69,000 53,000 9,165,000 Division B 1,015,000 745,000 57,000 46,000 2,165,000 Division C 1,008,000 732,000 58,000 46,000 3,562,000 Wescott is considering an expansion project in the upcoming year that will cost...
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