Question

A family friend has asked your help in analyzing the operations of three anonymous companies operating in the same service sector industry. Supply the missing data in the table below: (Loss amounts should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to nearest whole number.) с А 400,000 Company в 710,000 38,000 $ $ 690,000 $ $ Sales Net operating income Average operating assets Return on investment (ROI) Minimum required rate of return: $ $ 154,000 154,000 22 % 18 % Percentage 13 % 14 % Dollar amount | $ 48,000 Residual income $ 7,000

Answer 1

Answers

	A	B	C
Sales	$400,000	$710,000	$690,000
Net Operating Income	$33,880	$38,000	$28,560
Average Operating Assets	$154,000	$211,111	$154,000
ROI	22%	18%	19%
Minimum required ROR:
Percentage	13%	23%	14%
Dollar amount	$20,020	$48,000	$21,560
Residual Income	$13,860	($10,000)	$7,000

--Calculations

	A	B	C
Sales	400000	710000	690000
Net Operating Income	=154000*22%	38000	=21560+7000
Average Operating Assets	154000	=38000/18%	154000
ROI	0.22	0.18	=28560/154000
Minimum required ROR:
Percentage	0.13	=48000/211111	0.14
Dollar amount	=154000*13%	48000	=154000*14%
Residual Income	=33880-20020	=38000-48000	7000