Homework Answers
16.
Residual income = 30000 - 200000 *12/100 = 6000
option d is correct.
17.
Residual income = 34200 - 230000 *12/100 = 6600
option d is correct.
18.
34200 / 230000 = 14.87%
option c is correct.
Add Answer to:
Use the following information to answer Questions 16 through 18. The manager of Rushville Division estimates...
What is the residual income for Rushville Division with investment? (а) (b) (c) 9. $34,200. $...
What is the residual income for Rushville Division with investment? (а) (b) (c) 9. $34,200. $ 6,000 $10,200 S 6,600. What is the return on investment for Rushyille Division with the additional project investment? (a) (b) 10. 34.20% 12.00%. 14.87 % (d) 15.00%. 11. Mattoon Company uses part 65A in the production of color printers. Unit manufacturing costs of part 65A are shown below. MATTOON COMPANY UNIT COSTS INCURRED FOR PRODUCING PART 65A Direct materials 8.00 Direct labor 2.00 Variable...
11. A division manager is considering investing in a new product. The division's income is currently $960,000 with...
11. A division manager is considering investing in a new product. The division's income is currently $960,000 with operating assets of $16 million. The new product would increase income by $540,000 and would require an additional investment in equipment of $3 million. The ROI of the division before and after the investment is respectively: a. 6% and 18% c. 7.9% and 18% b. 6% and 7.9% d. 7.9% and 6%
Return on Investment for Multiple Investments, Residual Income The manager of a division that produces add-on...
Return on Investment for Multiple Investments, Residual Income The manager of a division that produces add-on products for the automobile industry has just been presented the opportunity to invest in two independent projects. The first is an air conditioner for the back seats of vans and minivans. The second is a turbocharger. Without the investments, the division will have average assets for the coming year of $29.4 million and expected operating income of $4.335 million. The outlay required for each...
Return on Investment for Multiple Investments, Residual Income The manager of a division that produces add-on...
Return on Investment for Multiple Investments, Residual Income The manager of a division that produces add-on products for the automobile industry has just been presented the opportunity to invest in two independent projects. The first is an air cond tioner for the back seats of vans and minivans. The second is a turbocharger. Without the investments, the division will have average assets for the coming year of $29.9 million and expected operating income of $4.335 million. The outlay required for...
Return on Investment and Investment Decisions Leslie Blandings, division manager of Audiotech Inc., was debating the...
Return on Investment and Investment Decisions Leslie Blandings, division manager of Audiotech Inc., was debating the merits of a new product-a weather radio that would put out a warning if the county in which the listener lived were under a severe thunderstorm or tomado alert. The budgeted income of the division was $775,000 with operating assets of $4,825,000. The proposed investment would add income of $640,000 and would require an additional investment in equipment of $4,000,000. The minimum required return...
Coolbrook Company has the following information available for the past year: River Division Stream Division Sales...
Coolbrook Company has the following information available for the past year: River Division Stream Division Sales revenue $ 1,218,000 $ 1,803,000 Cost of goods sold and operating expenses 887,000 1,297,000 Net operating income $ 331,000 $ 506,000 Average invested assets $ 1,030,000 $ 1,510,000 The company’s hurdle rate is 7.76 percent. Required: 1. Calculate return on investment (ROI) and residual income for each division for last year. River Division Stream Division ROI % % Residual Income (Loss) 2. Recalculate...
Coolbrook Company has the following information available for the past year: River Division Stream Division Sales...
Coolbrook Company has the following information available for the past year: River Division Stream Division Sales revenue $ 1,206,000 $ 1,808,000 Cost of goods sold and operating expenses 898,000 1,297,000 Net operating income $ 308,000 $ 511,000 Average invested assets $ 1,150,000 $ 1,460,000 The company’s hurdle rate is 6.01 percent. Required: 1. Calculate return on investment (ROI) and residual income for each division for last year. 2. Recalculate ROI and residual income for the division for each independent...
Calculating ROI – Use the following information for The Regal Company to compute ROI. Net operating...
Calculating ROI – Use the following information for The Regal Company to compute ROI. Net operating income ($50,000) Average operating assets ($230,000) Sales ($535,000) Operating expenses($485,000) Compute Regal's new ROI 1a. Assume that Regal's manager invests in a $30,000 piece of equipment that increases sales by $35,000, while increasing operating expenses by $15,000 and reports the following: Net operating income ($50,000) Average operating assets($230,000) Sales($535,000) Operating expenses ($485,000) Compute Regal’s new ROI. 1b. Computing Residual Income - The Retail Division...
Coolbrook Company has the following information available for the past year: River Division $1,219,000 890,000 Stream...
Coolbrook Company has the following information available for the past year: River Division $1,219,000 890,000 Stream Division Sales revenue Cost of goods sold and operating expenses $ 1,816,000 1, 300, еее $ Net operating income $ 329,000 516,000 Average invested assets $ 1,170,000 $ 1,530,000 The company's hurdle rate is 7.76 percent. Required: 1. Calculate return on investment (ROI) and residual income for each division for last year. 2. Recalculate ROI and residual income for the division for each independent...
Coolbrook Company has the following information available for the past year: River Division Stream Division Sales...
Coolbrook Company has the following information available for
the past year:
River Division
Stream Division
Sales revenue
$
1,210,000
$
1,814,000
Cost of goods sold and operating expenses
886,000
1,283,000
Net operating income
$
324,000
$
531,000
Average invested assets
$
1,190,000
$
1,560,000
The company’s hurdle rate is 6.26 percent.
b. Operating income decreases by 8 percent. River Division Stream Division ROI Residual Income (Loss) c. The company invests $248,000 in each division, an amount that generates $108,000 additional...
What is the residual income for Rushville Division with investment? (а) (b) (c) 9. $34,200. $ 6,000 $10,200 S 6,600. What is the return on investment for Rushyille Division with the additional project investment? (a) (b) 10. 34.20% 12.00%. 14.87 % (d) 15.00%. 11. Mattoon Company uses part 65A in the production of color printers. Unit manufacturing costs of part 65A are shown below. MATTOON COMPANY UNIT COSTS INCURRED FOR PRODUCING PART 65A Direct materials 8.00 Direct labor 2.00 Variable...
11. A division manager is considering investing in a new product. The division's income is currently $960,000 with operating assets of $16 million. The new product would increase income by $540,000 and would require an additional investment in equipment of $3 million. The ROI of the division before and after the investment is respectively: a. 6% and 18% c. 7.9% and 18% b. 6% and 7.9% d. 7.9% and 6%
Return on Investment for Multiple Investments, Residual Income The manager of a division that produces add-on products for the automobile industry has just been presented the opportunity to invest in two independent projects. The first is an air conditioner for the back seats of vans and minivans. The second is a turbocharger. Without the investments, the division will have average assets for the coming year of $29.4 million and expected operating income of $4.335 million. The outlay required for each...
Return on Investment for Multiple Investments, Residual Income The manager of a division that produces add-on products for the automobile industry has just been presented the opportunity to invest in two independent projects. The first is an air cond tioner for the back seats of vans and minivans. The second is a turbocharger. Without the investments, the division will have average assets for the coming year of $29.9 million and expected operating income of $4.335 million. The outlay required for...
Return on Investment and Investment Decisions Leslie Blandings, division manager of Audiotech Inc., was debating the merits of a new product-a weather radio that would put out a warning if the county in which the listener lived were under a severe thunderstorm or tomado alert. The budgeted income of the division was $775,000 with operating assets of $4,825,000. The proposed investment would add income of $640,000 and would require an additional investment in equipment of $4,000,000. The minimum required return...
Coolbrook Company has the following information available for the past year: River Division $1,219,000 890,000 Stream Division Sales revenue Cost of goods sold and operating expenses $ 1,816,000 1, 300, еее $ Net operating income $ 329,000 516,000 Average invested assets $ 1,170,000 $ 1,530,000 The company's hurdle rate is 7.76 percent. Required: 1. Calculate return on investment (ROI) and residual income for each division for last year. 2. Recalculate ROI and residual income for the division for each independent...
Coolbrook Company has the following information available for
the past year:
River Division
Stream Division
Sales revenue
$
1,210,000
$
1,814,000
Cost of goods sold and operating expenses
886,000
1,283,000
Net operating income
$
324,000
$
531,000
Average invested assets
$
1,190,000
$
1,560,000
The company’s hurdle rate is 6.26 percent.
b. Operating income decreases by 8 percent. River Division Stream Division ROI Residual Income (Loss) c. The company invests $248,000 in each division, an amount that generates $108,000 additional...
Most questions answered within 3 hours.
-
How much must I invest today if I want to withdraw 1/3 of my
original investment...
asked 29 minutes ago -
What is meant by a “term premium”?
What can explain such a premium? Is it a...
asked 2 hours ago -
23. Which molecule has only covalent bonds? A. CO2 B. Al2O3 C.
Mg3N2
24. The octet...
asked 2 hours ago -
the
total pressure for a mixture of N2O4 and NO2 is 2.20 atm. If Kp=
7.10...
asked 2 hours ago -
Delaware Corp. prepared a master budget that included $22,385
for direct materials, $28,600 for direct labor,...
asked 2 hours ago -
For pesticide HCB (hexachlorobenzene), its logarithmic partition
coefficient log Kow is 5.6. What would be the...
asked 2 hours ago -
A chemist requires 0.422 mil Na2CO3 for a reaction. How many
grams does this correspond to?
asked 2 hours ago -
If the vapor pressure of carvone is approximately 9.4 torr at 99
°C, approximately how much...
asked 3 hours ago -
A juice bottling company is carrying out a test at 10%
significance that the mean population...
asked 3 hours ago -
What is the reflectivity (in percent) needed to keep water at a
temperature near its freezing...
asked 3 hours ago -
Suppose that the average surface temperature of Earth is 300K.
Assume this is uniform over its...
asked 3 hours ago -
Draw the condensed structural formula for alkenes and alkynes or
the line-angle structural formula for cycloalkenes...
asked 3 hours ago