Homework Answers
ROI (return on investment) equals sales margins divided by the firm's capital turnover ratio,
Thus the answer is b)
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Heunlu GLiilialeu by each dollar of capital investment. 2) Which of the following is the correct...
Mastery Problem: Return on Investment, margin, and turnover Return on Investment (ROI) The manager of an...
Mastery Problem: Return on Investment, margin, and turnover Return on Investment (ROI) The manager of an investment center should be evaluated based on revenues, costs, and investments. An evaluation based on net income ignores the amount of investment the investment center required. One way to measure operating profit in relation to investment is a calculation called the return on investment. One formula for calculating return on investment is: Operating income Invested Assets ROI is effective because it takes into consideration...
QUESTION 10 Which of the following statements is correct concerning return on investment calculations? Margin equals...
QUESTION 10 Which of the following statements is correct concerning return on investment calculations? Margin equals stockholders' equity divided by sales Return on investment equals margin divided by turnover. Turnover equals return on investment divided by margin. Sales equals turnover divided by margin. QUESTION 11 Which of the following will NOT result in an increase in the residual income, assuming other factors remain constant? An increase in sales. An increase in the minimum required rate of return OA decrease in...
Which one of the following statements is correct concerning both the dollar return and the percentage...
Which one of the following statements is correct concerning both the dollar return and the percentage return on a stock investment? A) Without the size of an investment, the dollar return has less value than the percentage return. B) The dollar return is more accurate than the percentage return because the dollar return includes dividend income while the percentage return does not. C) The dollar return considers the time value of money while the percentage return does not. D) Dollar...
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...
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...
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).
Investment Center
Sales
Income
Average
Invested Assets
Electronics
$
40,500,000
$
2,916,000
$
16,200,000
Sporting goods
20,740,000
2,074,000
12,200,000
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?
Complete this question by entering your answers in the...
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). Investment Center Electronics Sporting goods Sales Income $40,500,000 $2,916,000 20,740,000 2,074,000 Average Invested Assets $16,200,000 12,200,000 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? Complete this question by entering your answers in the tabs below. Profit...
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 $42,250,000 $3,211,000 19,350,000 2,322,000 Average Invested Assets $16,900,000 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 income level of...
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).
Investment Center
Sales
Income
Average
Invested Assets
Electronics
$
40,000,000
$
2,880,000
$
16,000,000
Sporting goods
20,000,000
2,040,000
12,000,000
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?
Compute profit margin for each department. Which department generates...
Return on investment can be split into which of the following two measures? Multiple Choice Investment...
Return on investment can be split into which of the following two measures? Multiple Choice Investment center income and profit margin. Profit margin and net income. Investment center average assets and investment turnover Residual income and operating income. Profit margin and investment turnover
QUESTION 10 Which of the following statements is correct concerning return on investment calculations? Margin equals stockholders' equity divided by sales Return on investment equals margin divided by turnover. Turnover equals return on investment divided by margin. Sales equals turnover divided by margin. QUESTION 11 Which of the following will NOT result in an increase in the residual income, assuming other factors remain constant? An increase in sales. An increase in the minimum required rate of return OA decrease in...
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...
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...
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
$
40,500,000
$
2,916,000
$
16,200,000
Sporting goods
20,740,000
2,074,000
12,200,000
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?
Complete this question by entering your answers in the...
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 $40,500,000 $2,916,000 20,740,000 2,074,000 Average Invested Assets $16,200,000 12,200,000 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? Complete this question by entering your answers in the tabs below. Profit...
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 $42,250,000 $3,211,000 19,350,000 2,322,000 Average Invested Assets $16,900,000 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 income level of...
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
$
40,000,000
$
2,880,000
$
16,000,000
Sporting goods
20,000,000
2,040,000
12,000,000
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?
Compute profit margin for each department. Which department generates...
Return on investment can be split into which of the following two measures? Multiple Choice Investment center income and profit margin. Profit margin and net income. Investment center average assets and investment turnover Residual income and operating income. Profit margin and investment turnover
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