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Homework Answers
| Return on Investment | |||
| Numerator | Denominator | ROI | |
| Annual Net Income | Average Invested Assets | ROI | |
| Electronics | $ 32,11,000 | $ 1,69,00,000 | 19.00% |
| Sporting goods | $ 23,22,000 | $ 1,29,00,000 | 18.00% |
| Electronics Department is more efficient | |||
| Investment Center | Electronics | Sporting goods | |
| Net Income | $ 32,11,000 | $ 23,22,000 | |
| Target Net Income(Average Invested Assets*12%) | $ 20,28,000 | $ 15,48,000 | |
| Residual Income | $ 11,83,000 | $ 7,74,000 | |
| Electronics Department is more efficient | |||
| No the investment opportunity should not be accepted as the Residual Income would decrease | |||
| Profit Margin | |||
| Numerator | Denominator | Profit Margin | |
| Investment Center | Annual Net Income | Net Sales | Profit Margin |
| Electronics | $ 32,11,000 | $ 4,22,50,000 | 7.60% |
| Sporting goods | $ 23,22,000 | $ 1,93,50,000 | 12.00% |
| Sporting goods generates more net income per dollar of sales | |||
| Investment Turnover | |||
| Numerator | Denominator | Investment Turnover | |
| Investment Center | Net Sales | Average Invested Assets | Investment Turnover |
| Electronics | $ 4,22,50,000 | $ 1,69,00,000 | 2.50 |
| Sporting goods | $ 1,93,50,000 | $ 1,29,00,000 | 1.50 |
| Electronics is more efficient | |||
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Required information (The following information applies to the questions displayed below.] Megamart, a retailer of consumer...
Required information The following information applies to the questions displayed below. Megamart, a retailer of consumer...
Required information The following information applies to the questions displayed below. Megamart, a retailer of consumer goods, provides the following information on two of its departments (each considered an investment center) Investment Center Electronics Sporting goods Sales $34,800,000 20,100,000 Income $3,306, 10 2,412,000 Average Invested Assets $17, 400, BGD 13,400,000 1. Compute return on investment for each department. Using retum on investment, which department is most efficient at using assets to generate returns for the company 2. Assume a target...
Required information [The following information applies to the questions displayed below.) Megamart, a retailer of consumer...
Required information [The following information applies to the questions displayed below.) Megamart, a retailer of consumer goods, provides the following information on two of its departments (each considered an investment center). Investment Center Electronics Sporting goods Sales Income $ 42,960,000 $3,222,000 18,904,000 2,363,000 Average Invested Assets $17,900,000 13,900,000 Compute profit margin and investment turnover for each department. Which department generates the most net income per dollar of sales? Which department is most efficient at generating sales from average invested assets?...
Required information [The following information applies to the questions displayed below.] Megamart, a retailer of consumer...
Required information [The following information applies to the questions displayed below.] Megamart, a retailer of consumer goods, provides the following information on two of its departments (each considered an investment center). Investment Center Electronics Sporting goods Sales Income $39, 840,000 $2,988,000 25,200,000 2,142,000 Average Invested Assets $16,600,000 12,600,000 Compute profit margin and investment turnover for each department. Which department generates the most net income per dollar of sales? Which department is most efficient at generating sales from average invested assets?...
Megamart, a retailer of consumer goods, provides the following information on two of its departments (each...
Megamart, a retailer of consumer goods, provides the following information on two of its departments (each considered an investment center). Average Invested Assets $16,900,000 12,900,000 Investment Center Sales Income $42,250,000 $3,211,000 2,322,000 Electronics Sporting goods 19,350,000 Exercise 9-10 Computing return on investment and residual income; investing decision LO A1 1 Compute return on investment for each department. Using return on investment, which department is most efficient at using assets to generate returns for the company? 2. Assume a target income...
Required information [The following information applies to the questions displayed below.) Megamart, a retailer of consumer...
Required information [The following information applies to the questions displayed below.) Megamart, a retailer of consumer goods, provides the following information on two of its departments (each considered an investment center). Investment Center Electronics Sporting goods Sales Income $ 40, 800,000 $3,060,000 17,680,000 2,210,000 Average Invested Assets $17,000,000 13,000,000 1. Compute return on investment for each department. Using return on investment, which department is most efficient at using assets to generate returns for the company? 2. Assume a target income...
Required information [The following information applies to the questions displayed below.] Megamart, a retailer of consumer...
Required information [The following information applies to the questions displayed below.] Megamart, a retailer of consumer goods, provides the following information on two of its departments (each considered an investment center). Investment Center Sales Income Average Invested Assets Electronics $ 42,250,000 $ 3,211,000 $ 16,900,000 Sporting goods 19,350,000 2,322,000 12,900,000 1. Compute return on investment for each department. Using return on investment, which department is most efficient at using assets to generate returns for the company? 2. Assume a target...
Required information (The following information applies to the questions displayed below.) Megamart, a retailer of consumer...
Required information (The following information applies to the questions displayed below.) Megamart, a retailer of consumer goods, provides the following information on two of its departments (each considered an investment center). Investment Center Electronics Sporting goods Sales Income $ 42,960,000 $3,222,000 18,904,000 2,363,000 Average Invested Assets $17,900,000 13,900,000 1. Compute return on investment for each department. Using return on investment, which department is most efficient at using assets to generate returns for the company? 2. Assume a target income level...
Required information [The following information applies to the questions displayed below.] Megamart, a retailer of consumer...
Required information [The following information applies to the questions displayed below.] Megamart, a retailer of consumer goods, provides the following information on two of its departments (each considered an investment center) Investment Center Electronics Sporting goods Sales Income $63,460,000 $3,173,000 19,650,000 2,286,000 Average Invested Assets $16,700,000 12,700,000 1. Compute return on investment for each department. Using return on investment, which department is most efficient at using assets to generate returns for the company? 2. Assume a target income level of...
Use the following information for the Exercises below. [The following information applies to the questions displayed...
Use the following information for the Exercises below. [The following information applies to the questions displayed below.) Megamart, a retailer of consumer goods, provides the following information on two of its departments (each considered an investment center). Investment Center Electronics Sporting goods Sales Income $45,000,000 $3,420,000 25,200,000 2,520,000 Average Invested Assets $18,000,000 14,000,000 Exercise 24-10 Computing return on investment and residual income; investing decision LO A1 1. Compute return on investment for each department. Using return on investment, which department...
The following information applies to the questions displayed below. Megamart, a retailer of consumer goods, provides...
The following information applies to the questions displayed below. Megamart, a retailer of consumer goods, provides the following information on two of its departments (each considered an investment center). Investment Center Electronics Sporting goods Sales Income $42,240,000 $3,168,000 23, 120,000 2,312.000 Average Invested Assets $17,600,000 13.600.000 1. Compute return on investment for each department. Using return on investment, which department is most efficient at using assets to generate returns for the company? 2. Assume a target income level of 11%...
Required information The following information applies to the questions displayed below. Megamart, a retailer of consumer goods, provides the following information on two of its departments (each considered an investment center) Investment Center Electronics Sporting goods Sales $34,800,000 20,100,000 Income $3,306, 10 2,412,000 Average Invested Assets $17, 400, BGD 13,400,000 1. Compute return on investment for each department. Using retum on investment, which department is most efficient at using assets to generate returns for the company 2. Assume a target...
Required information [The following information applies to the questions displayed below.) Megamart, a retailer of consumer goods, provides the following information on two of its departments (each considered an investment center). Investment Center Electronics Sporting goods Sales Income $ 42,960,000 $3,222,000 18,904,000 2,363,000 Average Invested Assets $17,900,000 13,900,000 Compute profit margin and investment turnover for each department. Which department generates the most net income per dollar of sales? Which department is most efficient at generating sales from average invested assets?...
Required information [The following information applies to the questions displayed below.] Megamart, a retailer of consumer goods, provides the following information on two of its departments (each considered an investment center). Investment Center Electronics Sporting goods Sales Income $39, 840,000 $2,988,000 25,200,000 2,142,000 Average Invested Assets $16,600,000 12,600,000 Compute profit margin and investment turnover for each department. Which department generates the most net income per dollar of sales? Which department is most efficient at generating sales from average invested assets?...
Megamart, a retailer of consumer goods, provides the following information on two of its departments (each considered an investment center). Average Invested Assets $16,900,000 12,900,000 Investment Center Sales Income $42,250,000 $3,211,000 2,322,000 Electronics Sporting goods 19,350,000 Exercise 9-10 Computing return on investment and residual income; investing decision LO A1 1 Compute return on investment for each department. Using return on investment, which department is most efficient at using assets to generate returns for the company? 2. Assume a target income...
Required information [The following information applies to the questions displayed below.) Megamart, a retailer of consumer goods, provides the following information on two of its departments (each considered an investment center). Investment Center Electronics Sporting goods Sales Income $ 40, 800,000 $3,060,000 17,680,000 2,210,000 Average Invested Assets $17,000,000 13,000,000 1. Compute return on investment for each department. Using return on investment, which department is most efficient at using assets to generate returns for the company? 2. Assume a target income...
Required information (The following information applies to the questions displayed below.) Megamart, a retailer of consumer goods, provides the following information on two of its departments (each considered an investment center). Investment Center Electronics Sporting goods Sales Income $ 42,960,000 $3,222,000 18,904,000 2,363,000 Average Invested Assets $17,900,000 13,900,000 1. Compute return on investment for each department. Using return on investment, which department is most efficient at using assets to generate returns for the company? 2. Assume a target income level...
Required information [The following information applies to the questions displayed below.] Megamart, a retailer of consumer goods, provides the following information on two of its departments (each considered an investment center) Investment Center Electronics Sporting goods Sales Income $63,460,000 $3,173,000 19,650,000 2,286,000 Average Invested Assets $16,700,000 12,700,000 1. Compute return on investment for each department. Using return on investment, which department is most efficient at using assets to generate returns for the company? 2. Assume a target income level of...
Use the following information for the Exercises below. [The following information applies to the questions displayed below.) Megamart, a retailer of consumer goods, provides the following information on two of its departments (each considered an investment center). Investment Center Electronics Sporting goods Sales Income $45,000,000 $3,420,000 25,200,000 2,520,000 Average Invested Assets $18,000,000 14,000,000 Exercise 24-10 Computing return on investment and residual income; investing decision LO A1 1. Compute return on investment for each department. Using return on investment, which department...
The following information applies to the questions displayed below. Megamart, a retailer of consumer goods, provides the following information on two of its departments (each considered an investment center). Investment Center Electronics Sporting goods Sales Income $42,240,000 $3,168,000 23, 120,000 2,312.000 Average Invested Assets $17,600,000 13.600.000 1. Compute return on investment for each department. Using return on investment, which department is most efficient at using assets to generate returns for the company? 2. Assume a target income level of 11%...
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