Homework Answers
Return on investment
Return on investment for the investment center = [Controllable margin / Average operating assets] x 100
= [$150,000 / $1,000,000] x 100
= 15%
“Hence, the Return on investment for the investment center will be 15%”
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Question 2 (1 point) If an investment center has generated a controllable margin of $150,000 and...
Problem - Return on Investment Circle one correct letter. Each correct answeris worth 1.5 point(s). 1....
Problem - Return on Investment Circle one correct letter. Each correct answeris worth 1.5 point(s). 1. Return on investment is calculated by dividing: a contribution margin by sales. b controllable margin by sales. contribution margin by average operating assets. d controllable margin by average operating assets. с 2. What is the return on investment for Las Sendas, Inc. for 2016 when: Sales: Average operating assets: Controllable margin: $2,000,000 $4,000,000 $600,000 a. 60% b. 50% c. 30% d. 15%
Question 5 (1 point) The denominator in the formula for return on investment calculation is a)...
Question 5 (1 point) The denominator in the formula for return on investment calculation is a) investment center average operating assets. b) sales for the period. c) dependent on the specific type of profit center. d) investment center controllable margin.
Question 33 Return on investment is often expressed as follows: Controllable margin Average opcra...
Question 33 Return on investment is often expressed as follows: Controllable margin Average opcrating asscts Controllable margin Salcs Sales Averege operating asscts (b1) Comparative data on three companies operating in the same industry follow. The minimum required ROI is 10% or all three companies Determine the missing ฮmounts. Round asset turnover of Company B הnd return on investment of Company C to 1 decimal place, e.g. 15.2 or 15.2% and all other answers to 0 decimal places, eg. 152. Enter...
Question 3 1 pts Advantages of a flexible budget include all of these, EXCEPT: it is...
Question 3 1 pts Advantages of a flexible budget include all of these, EXCEPT: it is appropriate for fixed costs, but not variable costs. it is adaptable to changes in operating conditions it can be prepared for individual budgets in the Master Budget all of the above are advantages of a flexible budget Question 4 1pts An investment center manager would most likely have his/her performance evaluation based on: return on investment controllable margin. how well he/she was able to...
Question 3 (1 point) Las Sendas, Inc. had average operating assets of $4,000,000 and sales of $2,000,000 in 2013. I...
Question 3 (1 point) Las Sendas, Inc. had average operating assets of $4,000,000 and sales of $2,000,000 in 2013. If the controllable margin was $600,000, the ROI was a) 60% b) 50% c) 30% d) 15%
Marigold Pharmaceuticals is evaluating its Vioxx division, an investment centre. The division has a $44800 controllable...
Marigold Pharmaceuticals is evaluating its Vioxx division, an investment centre. The division has a $44800 controllable margin and $298000 of sales. How much will Marigold’s average operating assets be when its return on investment is 8%? $560000 $604800 $298000 $253200
Brief Exercise 10-10o For its three investment centers, Gerrard Company accumulates the following data: Sales Controllable...
Brief Exercise 10-10o For its three investment centers, Gerrard Company accumulates the following data: Sales Controllable margin Average operating assets the centers expect the folio ing changes n the next year: 1 increase sales 20%, a decrease costsp90,000: Compute the expected return on investment (ROI) for each center. Assume center t has a controlable margin percentage of 70% (Round nor to 1 deci $1,980,000 $3,916,000 $4,041,000 1,169,320 2,150,280 4,597,620 5,084,000 7,964,000 12.099,000 (III) decrease average operating assets $496,000. al p...
10. Division A, an investment center, has operating income = $40,000 for the prior period. The...
10. Division A, an investment center, has operating income = $40,000 for the prior period. The residual income during this period is $10,000. If Division A's investment assets - $150,000, then cost of capital set by the corporation's top management must be: a. 12% c. 25% b. 15% d. 20%
Question 7 View Policies Current Attempt in Progress For its three investment centers, Gerrard Company accumulates...
Question 7 View Policies Current Attempt in Progress For its three investment centers, Gerrard Company accumulates the following data: Sales $1,996,000 $4,043,000 $3,962,000 785,760 2,663,760 4,372,200 Controllable margin Average operating assets 4,911,000 8,072,000 12,145,000 Compute the return on investment (ROI) for each center. The return on investment
Brief Exercise 10-10 For its three investment centers, Gerrard Company accumulates the following data: І II...
Brief Exercise 10-10 For its three investment centers, Gerrard Company accumulates the following data: І II Sales Controllable margin Average operating assets $1,920,000 1,344,000 4,903,000 $4,013,000 2,006,500 8,021,000 III $4,033,000 3,629,700 12,010,000 The centers expect the following changes in the next year: (I) increase sales 14%; (II) decrease costs $404,000; (III) decrease average operating assets $534,000. Compute the expected return on investment (ROI) for each center. Assume center I has a controllable margin percentage of 70%. (Round ROI to 1...
Problem - Return on Investment Circle one correct letter. Each correct answeris worth 1.5 point(s). 1. Return on investment is calculated by dividing: a contribution margin by sales. b controllable margin by sales. contribution margin by average operating assets. d controllable margin by average operating assets. с 2. What is the return on investment for Las Sendas, Inc. for 2016 when: Sales: Average operating assets: Controllable margin: $2,000,000 $4,000,000 $600,000 a. 60% b. 50% c. 30% d. 15%
Question 5 (1 point) The denominator in the formula for return on investment calculation is a) investment center average operating assets. b) sales for the period. c) dependent on the specific type of profit center. d) investment center controllable margin.
Question 33 Return on investment is often expressed as follows: Controllable margin Average opcrating asscts Controllable margin Salcs Sales Averege operating asscts (b1) Comparative data on three companies operating in the same industry follow. The minimum required ROI is 10% or all three companies Determine the missing ฮmounts. Round asset turnover of Company B הnd return on investment of Company C to 1 decimal place, e.g. 15.2 or 15.2% and all other answers to 0 decimal places, eg. 152. Enter...
Question 3 1 pts Advantages of a flexible budget include all of these, EXCEPT: it is appropriate for fixed costs, but not variable costs. it is adaptable to changes in operating conditions it can be prepared for individual budgets in the Master Budget all of the above are advantages of a flexible budget Question 4 1pts An investment center manager would most likely have his/her performance evaluation based on: return on investment controllable margin. how well he/she was able to...
Question 3 (1 point) Las Sendas, Inc. had average operating assets of $4,000,000 and sales of $2,000,000 in 2013. If the controllable margin was $600,000, the ROI was a) 60% b) 50% c) 30% d) 15%
Brief Exercise 10-10o For its three investment centers, Gerrard Company accumulates the following data: Sales Controllable margin Average operating assets the centers expect the folio ing changes n the next year: 1 increase sales 20%, a decrease costsp90,000: Compute the expected return on investment (ROI) for each center. Assume center t has a controlable margin percentage of 70% (Round nor to 1 deci $1,980,000 $3,916,000 $4,041,000 1,169,320 2,150,280 4,597,620 5,084,000 7,964,000 12.099,000 (III) decrease average operating assets $496,000. al p...
10. Division A, an investment center, has operating income = $40,000 for the prior period. The residual income during this period is $10,000. If Division A's investment assets - $150,000, then cost of capital set by the corporation's top management must be: a. 12% c. 25% b. 15% d. 20%
Question 7 View Policies Current Attempt in Progress For its three investment centers, Gerrard Company accumulates the following data: Sales $1,996,000 $4,043,000 $3,962,000 785,760 2,663,760 4,372,200 Controllable margin Average operating assets 4,911,000 8,072,000 12,145,000 Compute the return on investment (ROI) for each center. The return on investment
Brief Exercise 10-10 For its three investment centers, Gerrard Company accumulates the following data: І II Sales Controllable margin Average operating assets $1,920,000 1,344,000 4,903,000 $4,013,000 2,006,500 8,021,000 III $4,033,000 3,629,700 12,010,000 The centers expect the following changes in the next year: (I) increase sales 14%; (II) decrease costs $404,000; (III) decrease average operating assets $534,000. Compute the expected return on investment (ROI) for each center. Assume center I has a controllable margin percentage of 70%. (Round ROI to 1...
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