Homework Answers
| Operating Profit | 6,355,000 | 41,730,000 |
| Investment | 31,000,000 | 321,000,000 |
| a-1 ROI = Operating Income/Operating Investment | 20.50% | 13.00% |
| a-2 North Division perfomed Better | ||
| b-1 EVA = Operating Profit - Investment*Cost of Capital | 3,565,000 | 12,840,000 |
| b-2 South Division since higher EVA | ||
| c-1 NO, since Cost of capital does not affect ROI | ||
| EVA | 1,085,000 | (12,840,000) |
| Yes, since North Division is better now |
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The following data are available for two divisions of Solomons Company North Division South Division Division...
The following data are available for two divisions of Solomons Company: North Division South Division Division...
The following data are available for two divisions of Solomons Company: North Division South Division Division operating profit $ 8,695,000 $ 45,780,000 Division investment 37,000,000 327,000,000 The cost of capital for the company is 8 percent. Ignore taxes. Required: a-1. Calculate the ROI for both North and South divisions. (Enter your answers as a percentage rounded to 1 decimal place (i.e., 32.1).) a-2. If Solomons measures performance using ROI, which division had the better performance? North South b-1. Calculate the...
The following data are available for two divisions of Solomons Company. North Division South Division Division...
The following data are available for two divisions of Solomons Company. North Division South Division Division operating profit $ 6,720,000 $ 43,470,000 Division investment 32,000,000 322,000,000 The cost of capital for the company is 7 percent. Ignore taxes. Required: a-1. Calculate the ROI for both North and South divisions. a-2. If Solomons measures performance using ROI, which division had the better performance? b-1. Calculate the EVA for both North and South divisions. (The divisions have no current liabilities.) b-2. If...
Ch The following data are available for two divisions of Solomons Company. Division operating profit Division...
Ch The following data are available for two divisions of Solomons Company. Division operating profit Division investment North Division South Division $ 9,200,000 $ 42,000,000 46,000,000 336,000,000 The cost of capital for the company is 7 percent. Ignore taxes. Required: a-1. Calculate the ROI for both North and South divisions. a-2. If Solomons measures performance using ROI, which division had the better performance? b-1. Calculate the EVA for both North and South divisions. (The divisions have no current liabilities.) b-2....
Selected sales and operating data for three divisions of different structural engineering firms are given as...
Selected sales and operating data for three divisions of different structural engineering firms are given as follows: Sales Average operating assets Net operating income Minimum required rate of return Division A $ 12,600,000 $ 3,150,000 $ 516,600 9.00% Division B $ 35,750,000 $ 7,150,000 572,000 9.50 Division C $20,600,000 $ 5,150,000 5 597,480 11.60% 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...
Selected sales and operating data for three divisions of different structural engineering firms are given as...
Selected sales and operating
data for three divisions of different structural engineering firms
are given as follows: Division A Division B Division C Sales $
6,000,000 $ 10,000,000 $ 9,100,000 Average operating assets $
1,200,000 $ 2,500,000 $ 1,820,000 Net operating income $ 306,000 $
910,000 $ 213,850 Minimum required rate of return 20.00 % 36.40 %
17.00 % Required: 1. Compute the return on investment (ROI) for
each division using the formula stated in terms of margin and
turnover....
Check my work Zachary Chicken Corporation processes and packages chicken for grocery stores. It purchases chickens...
Check my work Zachary Chicken Corporation processes and packages chicken for grocery stores. It purchases chickens from farmers and processes them into two different products: chicken drumsticks and chicken steak. From a standard batch of 23,000 pounds of raw chicken that costs $14,200, the company produces two parts: 2,500 pounds of drumsticks and 6,000 pounds of breast for a processing cost of $2,282. The chicken breast is further processed into 5,200 pounds of steak for a processing cost of $3,300....
Selected sales and operating data for three divisions of different structural engineering firms are given as...
Selected sales and operating data for three divisions of different structural engineering firms are given as follows: Sales Average operating assets Net operating income Minimum required rate of return Division A $12,640,000 $ 3,160,000 $ 606,720 10.00% Division B $ 35,800,000 $ 7,160,000 $ 608,600 10.500 Division C $20,640,000 $5,160,000 $ 577,920 1.200 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)...
I just missed the 2 required can you answer with explian Orange Corp. has two divisions:...
I just missed the 2 required
can you answer with explian
Orange Corp. has two divisions: Fruit and Flower. The following Information for the past year is available for each division $ Sales revenue Cost of goods sold and operating expenses Net operating Income Average invested assets Truit Division 660,000 495,000 165,000 2,062,500 990,000 742,500 247,500 1,375,000 $ $ $ Orange has established a hurdle rate of 5 percent. Required: 1-a. Compute each division's return on investment (ROI) and residual...
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...
Orange Corp. has two divisions: Fruit and Flower. The following information for the past year is...
Orange Corp. has two divisions: Fruit and Flower. The following information for the past year is available for each division Sales revenue Cost of goods sold and operating expenses Net operating income Average invested assets Fruit Division Flower Division $ 1.620,NNO $ 2,430,689 1.134.000 1.822.589 $ 486,000 $ 687,569 $ 4,050,000 $ 2,430,000 Orange has established a hurdle rate of 10 percent Required: 1-a. Compute each division's return on investment (ROI) and residual income for last year. 1-b. Determine which...
Ch The following data are available for two divisions of Solomons Company. Division operating profit Division investment North Division South Division $ 9,200,000 $ 42,000,000 46,000,000 336,000,000 The cost of capital for the company is 7 percent. Ignore taxes. Required: a-1. Calculate the ROI for both North and South divisions. a-2. If Solomons measures performance using ROI, which division had the better performance? b-1. Calculate the EVA for both North and South divisions. (The divisions have no current liabilities.) b-2....
Selected sales and operating data for three divisions of different structural engineering firms are given as follows: Sales Average operating assets Net operating income Minimum required rate of return Division A $ 12,600,000 $ 3,150,000 $ 516,600 9.00% Division B $ 35,750,000 $ 7,150,000 572,000 9.50 Division C $20,600,000 $ 5,150,000 5 597,480 11.60% 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...
Selected sales and operating
data for three divisions of different structural engineering firms
are given as follows: Division A Division B Division C Sales $
6,000,000 $ 10,000,000 $ 9,100,000 Average operating assets $
1,200,000 $ 2,500,000 $ 1,820,000 Net operating income $ 306,000 $
910,000 $ 213,850 Minimum required rate of return 20.00 % 36.40 %
17.00 % Required: 1. Compute the return on investment (ROI) for
each division using the formula stated in terms of margin and
turnover....
Check my work Zachary Chicken Corporation processes and packages chicken for grocery stores. It purchases chickens from farmers and processes them into two different products: chicken drumsticks and chicken steak. From a standard batch of 23,000 pounds of raw chicken that costs $14,200, the company produces two parts: 2,500 pounds of drumsticks and 6,000 pounds of breast for a processing cost of $2,282. The chicken breast is further processed into 5,200 pounds of steak for a processing cost of $3,300....
Selected sales and operating data for three divisions of different structural engineering firms are given as follows: Sales Average operating assets Net operating income Minimum required rate of return Division A $12,640,000 $ 3,160,000 $ 606,720 10.00% Division B $ 35,800,000 $ 7,160,000 $ 608,600 10.500 Division C $20,640,000 $5,160,000 $ 577,920 1.200 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)...
I just missed the 2 required
can you answer with explian
Orange Corp. has two divisions: Fruit and Flower. The following Information for the past year is available for each division $ Sales revenue Cost of goods sold and operating expenses Net operating Income Average invested assets Truit Division 660,000 495,000 165,000 2,062,500 990,000 742,500 247,500 1,375,000 $ $ $ Orange has established a hurdle rate of 5 percent. Required: 1-a. Compute each division's return on investment (ROI) and residual...
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...
Orange Corp. has two divisions: Fruit and Flower. The following information for the past year is available for each division Sales revenue Cost of goods sold and operating expenses Net operating income Average invested assets Fruit Division Flower Division $ 1.620,NNO $ 2,430,689 1.134.000 1.822.589 $ 486,000 $ 687,569 $ 4,050,000 $ 2,430,000 Orange has established a hurdle rate of 10 percent Required: 1-a. Compute each division's return on investment (ROI) and residual income for last year. 1-b. Determine which...
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