(a)
ROI | 67.3% |
Explanations :-
ROI | |
Net Income | $3,235,000 |
÷ Total Assets | $4,810,000 |
Return on Investment | 67.3% |
Total Assets | |
Beginning Assets | $4,500,000 |
Add: Beginning Investment | $3,000,000 |
Less: Total Depreciation | $2,690,000 |
$ 4,810,000 |
(b)
ROI | 16.0% |
Explanations :-
ROI | |
Net Income | $1,725,000 |
÷ Total Assets | $10,800,000 |
Return on Investment | 16.0% |
Net Income | |
Division operating profit | $3,235,000 |
Less: Loss on sale of equipment | $1,510,000 |
($3000000 - $1490000) | |
Net Income | $1,725,000 |
Total Assets | |
Beginning Assets | $4,500,000 |
Less:Depreciation | $1,200,000 |
Add: New Equipment | $7,500,000 |
$ 10,800,000 |
(c)
ROI | 59.0% |
Explanations :-
ROI | ||
Net Income | $4,632,500 | |
÷ Total Assets | $7,850,000 | |
Return on Investment | 59.0% | |
Net Income | ||
Sales Revenue | $16,500,000 | (up 10%) |
Cost: | ||
Variable | $2,172,500 | (up 10%) |
Fixed | $6,745,000 | (down 5%) |
Depreciation: | ||
Equipment ($75m - $5m)/4 years | $1,750,000 | |
Other | $1,200,000 | |
Net Income | $4,632,500 | |
Total Assets | ||
Beginning Assets | $4,500,000 | |
Less: Depreciation ($1200000*2) | $2,400,000 | |
Add: New Equipment | $7,500,000 | |
Less: Depreciation on new equipment | $1,750,000 | |
$ 7,850,000 |
Oscar Clemente is the manager of Forbes Division of Pitt, Inc., a manufacturer of biotech products....
Oscar Clemente is the manager of Forbes Division of Pitt, Inc., a manufacturer of biotech products. Forbes Division, which has $3.5 E million in assets, manufactures a special testing device. At the beginning of the current year, Forbes invested $3.5 million in automated equipment for test machine assembly. The division's expected income statement at the beginning of the year was as follows. $15,800,000 1,925,000 7,300,000 Sales revenue Operating costs Variable Fixed (all cash) Depreciation New equipment Other Division operating profit...
Oscar Clemente is the manager of Forbes Division of Pitt, Inc., a manufacturer of biotech products. Forbes Division, which has $3 million in assets, manufactures a special testing device. At the beginning of the current year, Forbes invested $3 million in automated equipment for test machine assembly. The division's expected income statement at the beginning of the year was as follows. Sales revenue$15,500,000Operating costsVariable2,050,000Fixed (all cash)7,500,000DepreciationNew equipment1,480,000Other1,200,000Division operating profit$3,270,000 A sales representative from LSI Machine Company approached Oscar in October. LSI has...
Oscar Clemente is the manager of Forbes Division of Pitt, Inc., a manufacturer of biotech products. Forbes Division, which has $4.05 million in assets, manufactures a special testing device. At the beginning of the current year, Forbes invested $5.12 million in automated equipment for test machine assembly. The division’s expected income statement at the beginning of the year was as follows: Sales revenue $ 16,060,000 Operating costs Variable 2,100,000 Fixed (all cash) 7,660,000 Depreciation New equipment 1,560,000 Other 1,330,000 Division...
Oscar Clemente is the manager of Forbes Division of Pitt, Inc., a manufacturer of biotech products. Forbes Division, which has $4.09 million in assets, manufactures a special testing device. At the beginning of the current year, Forbes invested $5.03 million in automated equipment for test machine assembly. The division’s expected income statement at the beginning of the year was as follows. Sales revenue $ 16,040,000 Operating costs Variable 2,000,000 Fixed (all cash) 7,560,000 Depreciation New equipment 1,580,000 Other 1,330,000 Division...
Oscar Clemente is the manager of Forbes Division of Pitt, Inc., a manufacturer of blotech products. Forbes Division, which has $4 million in assets, manufactures a special testing device. At the beginning of the current year, Forbes invested $5 million in automated equipment for test machine assembly. The division's expected income statement at the beginning of the year was as follows. Sales revenue $16,000,000 Operating costs Variable 2,000,000 Fixed (all cash) 7,500,000 Depreciation New equipment 1,500,000 Other 1,250,000 Division operating...
Oscar Clemente is the manager of Forbes Division of Pitt, Inc., a manufacturer of biotech products. Forbes Division, which has $4 million in assets, manufactures a special testing device. At the beginning of the current year, Forbes invested $5 million in automated equipment for test machine assembly. The division’s expected income statement at the beginning of the year was as follows. Sales revenue $ 16,000,000 Operating costs Variable 2,000,000 Fixed (all cash) 7,500,000 Depreciation New equipment 1,500,000 Other 1,250,000 Division...
Oscar Clemente is the manager of Forbes Division of Pitt, Inc., a manufacturer of biotech products. Forbes Division, which has $4.11 million in assets, manufactures a special testing device. At the beginning of the current year, Forbes invested $5.05 million in automated equipment for test machine assembly. The division’s expected income statement at the beginning of the year was as follows. Sales revenue$16,080,000Operating costsVariable2,190,000Fixed (all cash)7,540,000DepreciationNew equipment1,590,000Other1,300,000Division operating profit$3,460,000 A sales representative from LSI Machine Company approached Oscar in October. LSI has...
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