Given Return on Investment =20% 23.5% c. 4.9% d. 18.6%, ABC Industries is a division of a major corporation. Using the DuPont formula for return on investment, determine the profit margin, investment turnover, and return on investment of the Consumer Products Division, assuming that 143,750,000 of assets have been invested in the Consumer Products Division. (Note: Round answer to two decimal places.) The following data are for the most recent year of operations: The company's minimum required rate of return14%. Data concerning the most recent year appears below: Dacker Products is a division of a major corporation. An advantage of using ROI to evaluate performance is that it encourages the manager to reduce the investment in operating assets as well as increase net operating income. Data concerning the most recent year appears below: Sales $17,610,000; Net operating income $1,021,380; Average operating assets $4,780,000. Communication The Norse Division of Gridiron Concepts Inc. experienced significant revenue and profit growth from 20Y4 to 20Y6 as shown in the following divisional income statements: There are no support department allocations, and the division operates as an investment center that must maintain a 15% return on invested assets. Multiple Choice Require, Cabal Products is a division of a Major Corporation. The following data are for the most recent year of operations: Sales $ 36,480,000 Net operating income $ 2,808,960 Average operating assets $ 8,000,000 The company's minimum required rate of return 16 % The division's residual income is closest to: Multiple Choice, Which of the following do you prefer for business/ economic transactions. The firm uses two departments to manufacture these jerseys: the Cutting Department and the Sewing, Allocation of OH Costs - Waterfall, Ltd.; Background information Waterfall, Ltd. manufactures custom basketball jerseys for professional basketball teams. True or False, Under the simplifying assumptions made in the text, to calculate the amount of income tax expense associated with an investment project, first calculate the incremental net cash inflow during each year of the project and then multiply each year's incremental net cash inflow by the tax rate. The division's return on investment (ROI) is closest to: The following data are for the Akron Division of Consolidated Rubber, Inc.: For the past year, the margin used in ROI calculations was: The Consumer Products Division of Goich Corporation had average operating assets of $1,300,000 and net operating income of. Last year the division had total sales of $16,260,000, net operating income of. Profit Margin Sales $38,000,000 Net Operating Income $2,800,000 Average Operating Assets $15,000,000 The company's minimum required rate of return 20% Requi, Chace Products is a division of a major corporation. The company has a soccer ball that sells for $30 per ball. = 5.77%, A: Cost accounting is the branch of accounting that inspects the cost structure of a business. ): Almendarez Corporation is considering the purchase of a machine that would cost $220,000 and would last for 9 years. If expenses could be reduced by 3,450,000 without decreasing sales, what would be the impact on the profit margin, investment turnover, and return on investment for the Consumer Products Division? Get access to this video and our entire Q&A library, What Is Residual Income? (Ignore income taxes.) ACCT 2402 Chapter-10 Quiz (Solutions) (1).docx. A. (Note: Round the answer for margin ratio to two decimal places.) In order to best encourage their individual performance development, what should yo Turnover=NetoperatingincomeAverageoperatingassets, A: Break even sale is the amount which covers all the costs incurred by an entity but do not result in, A: Residual income for the division = Net income - average invested capital x Cost of capital, A: Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for. Return on Investment, Margin, Turnover Data follow for the Consumer Products Division of Kisler Inc.: (Note: Round all answers to two decimal places.) Dacker Products is a division of a major corporation. 4. A company's current net operating income is $16,800 and its average operating assets are $80,000. If TARDIS produces at capacity, the per unit. The present value of the cash inflows would be $88,580. What is the return on investment for Division A? The income tax expense in year 2: The management of Leitheiser Corporation is considering a project that would require an initial investment of $57,000. The following data are for the last year of operations: Sales $19,080,000 Net operating income $591480 Average operating assets $6,000,000 Minimum required rate of return 12% The division's margin is c, Daab Products is a division of a major corporation. The company requires a minimum pretax return of 9% on all investment projects. The company's minimum required rate of return is 12%. 3. The new machine would replace some old equipment that would be sold for scrap now, yielding $21,300. The division's r, Iba Industries is a division of a major corporation. Compute the margin and turnover ratios for last year. Dacker Products is a division of a major corporation. was not in equilibrium for a product or service. a. Division A of Kern Co. has sales of $350,000, cost of goods sold of $200,000, operating expenses of $30,000, and invested assets of $600000. Average operating assets b. b. d. Why might the manager of the Specialty Products Division decide to reject the new product line? The residual income is the residue of net income after deducting an amount equivalent of cost of using the assets of the company funded by finance providers. 20% B. As a result, Xenold stock has an opportunity cost of 5 percent over the 4 percent long-term government bond rate. ABC Products is a division of a major corporation. 2. The company's minimum required rate of return is 12%. - Definition, Model & Formula, Daab Products is a division of a major corporation. This, A: Residual income = Operating income - (Average invested assets*Minimum required rate of return), A: Solution: $900,000 C. $660,000 D. $540,000. Xenold, Inc., manufactures and sells cooktops and ovens through three divisions: Home, Restaurant, and Specialty. A condensed income statement for the Specialty Products Division for the past year, assuming no support department allocations, along with asset information is as follows: The manager of the Specialty Products Division was recently presented with the opportunity to add an additional product line, which would require invested assets of 14,400,000. Variable manufacturing overhead 2 average Operating Assets is, A: Income statement is one of the financial statement being prepared by business for showing all. Know how to calculate residual income with examples. Profit margin, investment turnover, and return on investment The condensed income statement for the International Division of Valgenti Inc. is as follows (assuming no service department charges) The manager of the International Division is considering ways to increase the return on investment. The company's minimum required rate of return is 12%. Margin = NOI/Sales = NET OPERATING INCOME - (AVERAGE OPERATING ASSETS X MINIMUM REQUIRED RATE OF, A: Given information assets $ 8,600,000 The company's minimum required rate of return 16 Last year the division had total sales of $21,300,000, net operating income of $575,100, and average operating assets of $5,000,000. 5% c. 8.89% d. 11.25%, Esh Wares is a division of a major corporation. The division's margin is closest to: (a) 28.4% (b) 22.6% (c, Coolbrook company has the following information avaiable for past year. The company uses straight-line depreciation on all equipment. Eevee Company reported a contribution margin of 70,000 for Sylveon, A: Introduction:- Last year the division had total sales of $21,300,000, net operating income of $575,100 and average operating assets of $5,000,000 The company's minimum required rate of return is 12% The division s ma, Cooking Wares is a division of a major corporation. The division's, Cabal Products is a division of a major corporation. C) Have regularly scheduled performance reviews. Justify your choice, 1.Explain where the market equilibrium occurs. Dacker Products is a division of a major corporation. Minimum required return (8,000,000X16%)= 1,280,000, $2,808,960 - 1,280,000 = Residual Income - 1,528,960, This site is using cookies under cookie policy . Dacker Products is a division of a major corporation. Sales $38,000,000 Net Operating Income $2,800,000 Average Operating Assets $15,000,000 The com, Gaal Industries is a division of a major corporation. Compute the margin of safety in dollars based on the given income statement. Compute: - The divis, Cabell Products is a division of a major corporation. An outside supplier has offered to provide the annual requirement of 7,200 of the parts for only $13 each. Last year, the division had total sales of $25,540,000, net operating income of $1,277,000, and average operating assets of $7,151,200. Dacker Products is a division of a major corporation. Return On Investment =NetOperatingIncomeAverageOperatingAssets 2. Division A has operating income of $900,000 before service department charges and makes 60,000 payments to vendors. The company's minimum required rate of return is 12%. Assume that Tolar decides to upgrade the calculators. $ 9,900,000 5. A. It basically signifies the percentage return earned by an entity on, A: The following information Given in the question: Xenold, Inc., has two sources of financing: bonds paying 5 percent interest, which account for 25 percent of total investment, and equity accounting for the remaining 75 percent of total investment. Start your trial now! Comment on the performance of each of the divisions. Minimum required return =, A: RESIDUAL INCOME : 4. Compute the ROI and the margin and turnover ratios for each year for the Houseware Division. Start your trial now! Question: Dacker Products is a division of a major corporation. where, Last year, the division had total sales of $21,520,000, net operating income of $538,000, and average operating of $8,000,000. Turnover? Last year the division had total sales of $27,615,900, net operating income of $3,866,226, and average operating assets of $7,081,000. What are the invested capital and ROI for Macon? a; an Last year the division had total sales of $27,615,900, net operating income of. The profitability index of the project is closest to (Ignore income taxes. Last year the division had total sales of $23,510,300, net operating income of $2,562,623, and average operating assets of $7,018,000. Determine the profit margin, investment turnover, and return on investment for the Norse Division for 20Y420Y6. $3,866,226, and average operating assets of $7,081,000. Last year the division had total sales of $24,040,500, net operating income of $3,726,278, and average operating assets of $7,755,000. For the Small Appliances Division, calculate: a. Cash Vs Debit Card As an alternative, the calculators can be sold in their present condition for $40,000. 2. The company's minimum required rate of return is 12%. A variable interval schedule is one in which a response is reinforced only after an/a, b. unpredictable number of responses are made, c. specified number of responses are made. (Selling price to Outside customers, A: Return on Investment is used to evaluate the profitability of an asset or an investment and the. an; a The following data are for the latest year of operations: Sales $14,720,000 Net operating income $1,000,960 Average operating assets $4,000,000 The, Eacher Wares is a division of a major corporation. The annual depreciation on the new machine would be $88,300. Required: 1. 90 Inc. During the most recent year, Macon had a net income of $40 million. The condensed income statement for the Consumer Products Division of Tri-State Industries Inc. is as follows (assuming no support department allocations): The manager of the Consumer Products Division is considering ways to increase the return on investment. Last year, the division had total sales of $12,880,000, net operating income of $837,200, and average operating assets of $2,833,600. Maldonados minimum acceptable rate of return is 9%. The divisions have the following revenues and expenses for June 2022: Cassette Vinyl CD Revenues $82,000, The TARDIS Corporation produces and sells a single product--Sonic Screwdrivers. The compan, Gilde Industries is a division of a major corporation. an; an , gh it was immature attempt at humor. The company', Cabal Products is a division of a major corporation. following data are for the most recent year of operations: Sales $ It is calculated by, A: Given information 3. Margin, Turnover, Return on Investment, Average Operating Assets Elway Company provided the following income statement for the last year: At the beginning of last year, Elway had 28,300,000 in operating assets. % The division's residual income is closest to: Experts are tested by Chegg as specialists in their subject area. Dacker Products is a division of a major corporation. Below is selected prior year data from the Company. It, A: ROI (Return on Investment) is used to measure the efficiency of the business investment by, A: Margin = Earnings * 100/Sales Use the DuPont formula to compute the return on investment and show (A) the profit margin, (B) the investment turnover, and (C) the return on investment. The net present value of the proposed project is closest to: (Round your intermediate calculations and final answer to the nearest whole dollar amount. . A) ($3,000), Eacher Wares is a division of a major corporation. Last year the division had total sales of $23,878,800, net operating income of $3,056,486, and average operating assets of $8,844,000. The following data are for the latest year of operations: Sales $10,000,000 Net operating income $950,000 Average operating assets $4,000,000 The compa, I) The following information is available for our company for the current year: operating income, $45,000; average total assets, $400,000; net sales, $900,000; and required rate of return, 12%. The compan, Gilde Industries is a division of a major corporation. Compute ROI. The division's residual income is closest to: A: Residual Income $25,800 b. You'll get a detailed solution from a subject matter expert that helps you learn core concepts. Residual, A: Note: Some fixed cost are not allocable to the segment that type of cost are called Common fixed, A: Formula for EVA The company. Determine the Specialty Products Division managers bonus for the past year. River division Sales Revenue $1,200,000 Cogs and operating expenses 897,000 Net operating income 303,000 Average invested assets $1,110,000 Stream division Sales revenue $1,806,000, The following information relates to last year's operations at the Paper Division of Germane Corporation: Minimum required rate of return 15% Return on investment (ROI)18% Sales $810,000 Turnover (on operating assets) 5 times What was the Paper Division's, Division B had an ROI last year of 15%. Total sales $11650000 B. Katayama Company produces a variety of products. =. c) Contribution margin plus the minimum required return on a. Data concerning the most recent year appears below: Sales $17,950,000 Net operating income $1,005,200 Average operating assets $4,890,000 The division's margin is closest to: A. True or False, Sunk costs are never relevant in decision making. The following data are for the latest year of operations. 38.0% Required: 1. Residual income = Operating income - (Operating assets * Required rate of return), Become a Study.com member to unlock this answer! The company's m, Cabal Products is a division of a major corporation. Return on Investment in terms of Margin and, A: WorkingDivisionA The following data are for the latest year of operations: Sales $24,900,000 Net operating income 900,400 Average operating assets 6,000,000 Corporation's minimum required rate of return 12% Required: a, Eacher Wares is a division of a major corporation. (Round to four significant digits.) Compute ROI. (Round your answer up to the next whole unit.) Carl Warren, Ph.d. Cma William B. Tayler, Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger. Plainfield Manufacturing earned income of $845,000 from total sales of $9,350,000 and average capital assets of $13,500,000. 0.20 C. 5.1, Global Parts is a division of a major corporation. Last year the division had total sales of $26,110,000, net operating income of $1,801,590, and average operating assets of $7,000,000. The times recorded for a particular order appear below: Sunk costs are costs that have proven to be unproductive. ), Schlarbaum Corporation's management keeps track of the time it takes to process orders. The company's tax rate is 30%. u do first? The company's minimum required rate of return is 13%. A: a. Turnover=NetoperatingincomeAverageoperatingassets, A: Return on investment is one of the profitability ratio which is being used in business. The following data are for the most recent year of operations: Sales $11,520,000 Net operating income $322,560 Average operating assets $3,000,000 The company's minimum required rate of return 10% The di. A: Return on investment (ROI) helps to know about what can be earned through external funding. CONCEPTUAL CONNECTION Briefly explain the meaning of ROI. Suppose sales revenues exceed the estimated amount on the income statement by 612,000. e. Suggest an alternative performance measure for motivating division managers to accept new investment opportunities that would increase the overall company income and return on investment. Data concerning the most recent year appears below: Sales $18,080,000 Net operating income $940,160 Average operating assets $4,810,000 The division's turnover is closest to: A. Last year, the division had total sales of $10,040,000, net operating income of $582,320, and average operating assets of $4,000,000. The following data are for the most recent year of operations: Sales Net operating income Average operating assets The company's minimum required rate of return $37,580,000 $ 3,358,960 $ 9,100,000 14% The division's margin used to compute ROI is closest to: Multiple Choice 33.2% O 36.9% o 24.2% 8.9%. 2. Dacker Products is a division of a major corporation. Break even, A: Contribution Margin Ratio for the Division Q = INCOME FROM OPERATION - (MINIMUM RATE OF RETURN X INVESTED, A: Return on investment is the ratio of net income over investment which is used to evaluate the income, A: Return on investment = Net operating income / Average operating assets, A: Residual Income = Income from Operations -Invested Assets x Minimum rate of return What is the financial advantage (disadvantage) for the company from processing one batch of sugar beets into the end products industrial fiber and refined sugar rather than not processing that batch at all? Two intermediate products, beet fiber and beet juice, emerge from the crushing process. Compute the margin and turnover ratios for last year. ROI = Earnings * 100/Average operating assets, A: Break even Sales=FixedcostsxSalesSales-VariableCosts, A: solution : The division, Cabal Products is a division of a major corporation. What is the ROI? Course Hero is not sponsored or endorsed by any college or university. True or False, Fixed costs may be relevant in a decision. Margin c. Turnover d. Return on investment (ROI) 2. Dacker Products is a division of a major corporation. Comment on the performance of each of the divisions. The division, Dickonson Products is a division of a major corporation. $2,808,960 b. Dacker Products is a division of a major corporation. Compute the margin and turnover ratios for each year. . A: Here in this question, we are required to calculate break even point for Division A. Calculate the residual income for the Avila Division. C) Have regularly scheduled performance reviews. Dacker Products is a division of a major corporation. At the end of the year, Elway had 23,700,000 in operating assets. Turnover = Sales A: DuPont system: The following data are for the most recent year of operations: Sales $12,000,000 Net operating income $400,000 Average operating assets $2,500,000 Company's minimum required rate of return 10% The divisi, Esh Wares is a division of a major corporation. True or False, A complete income statement need not be prepared as part of a differential cost analysis. Xenold, Inc., has been in business for over 15 years and is considered a relatively stable stock, despite its link to the cyclical construction industry. Profit margin, investment turnover, and ROI Briggs Company has operating income of 36,000, invested assets of 180,000, and sales of 720,000. Course Hero is not sponsored or endorsed by any college or university. Last year the division had total sales of $26,320,000, net operating income of $2,424,320, and average operating assets of $7,000,000. Denominator The division turnover is closest to: A. a) What is t. Division B had an ROI last year of 15%. Average investment = $416500 (Note: Round the answer for margin ratio to two decimal places.) You'll get a detailed solution from a subject matter expert that helps you learn core concepts. The following data are for the most recent year of operations: Sales $ 36,480,000 Net operating income $ 2,808,960 Average operating assets $ 8,000,000 The company's minimum required rate of return 16 % The division's margin used to compute ROI is closest to: A) 21.9% B) 29.6% C) 7.7% D) 35.1% The times recorded for a particular order appear below: Cabell Products is a division of a major corporation. If these calculators are upgraded at a total cost of $100,000, they can be sold for a total of $160,000. Total assets were $470 million, current liabilities were $104,000,000, and $72,000,000 of the current liabilities are noninterest bearing. Sales, A: "Since you have posted a question with multiple sub-parts, we will solve first three subparts for. First week only $4.99! . Cabell Products is a division of a major corporation. The company's minimum required rate of return is 12%. Last year the division had total sales of $21,720,000, net operating income of $1,346,640, and average operating assets of $4,778,400. Click here to view Exhibit 13B-1 and Exhibit 13B-2, to determine the appropriate discount factor(s) using the tables provided. What is, ABC Products is a division of a major corporation. Xenolds total capital employed is 5.04 million (2,600,000 for the Home Division, 1,700,000 for the Restaurant Division, and the remainder for the Specialty Division). a. The beet juice can be sold as is for $51 or processed further for $33 to make the end product refined sugar that is sold for $77. These actions will increase sales revenues by 1 million. At present, the ball is, Clyde's Comfort, Inc., produces and sells four different sizes of dog beds: Small, Medium, Large, and Extra Large. 25% C. 33% D. 40%. Explain the change in ROI from Year 1 to Year 2 for each division. Last year the division had total sales of $23,100,000, income of and average operating assets of $5,500,000. Return On Investment =NetOperatingIncomeAverageOperatingAssets It analysis the organization's ability to increase its return on equity. Last year the division had total sales of $21,120,000, net operating income of $2,006,400, and average operating assets of $6,000,000. Turnover will be 4.Explain why the market was out of equilibrium (what caused it to be out of equilibrium) and what needed to be done to bring the market back to equilibrium. Dacker Products is a division of a major corporation. average Operating Assets is, A: Profit Margin = Income from Operations / Sales Net Profit = sales - cost of goods, A: Residual income means the income that one might continue to receive even after completion of the, A: Note:- Since you have posted a question with multiple sub-parts, we will solve the first three, A: Working Note: Nakama Corporation is considering investing in a project that would have a 4 year expected useful life. A) Set clear expectations for each team member, with SMART goals. a. At the end of the year, Elway had 23,700,000 in operating assets. The following data are for the most, The company's minimum required rate of return. A) Set clear expectations for each team member, with SMART goals. Compute the contribution margin per unit, and calculate the break-even point in units. Assume a tax rate of 34 percent. At what selling price per unit would the company be as well off as if it just sold the calculators in their present condition? If the balanced scorecard is correctly constructed, the performance measures should be independent of each other so that bad performance on one measure will not result in bad performance on another performance measure. The company's mi, Cabal Products is a division of a major corporation. Data concerning the most recent year appears below: Sales $17,810,000 Net operating income $783,640 Average operating assets $4,640,000 The division's return on investment (ROI) is: a. , gh it was immature attempt at humor. Each division is evaluated as a profit center. Last year the division had total sales of $20, 440,000, net operating income of $1, 860, 040, and average operating assets of $7,000,000. True or False, In calculating the payback period where new equipment is replacing old equipment, any salvage value to be received on disposal of the old equipment should be deducted from the cost of the new equipment. What is the residual income of the new project? =, A: (1) 25.8% 4.Explain why the market was out of equilibrium (what caused it to be out of equilibrium) and what needed to be done to bring the market back to equilibrium. What is the return on investment for Division A? Cabell Products is a division of a major corporation. (Round your answers to four significant digits.) Compute the operating leverage based on the given income statement. 2. Last year the division had total sales of $11,440,000, net operating income of $686,400, and average operating assets of $2,402,400. The comp, Gilde Industries is a division of a major corporation. 4.44% b. The company's minimum required rate of return is 13%. Division A of Kern Co. has sales of $350,000, cost of goods sold of $200,000, operating expenses of $30,000, and invested assets of $600000. Residual Income, A: Contribution margin for Business Division's = Sales - Variable expenses The company's required rate of return is 18%. If the division's average operating assets last year were $450,000, then the division's residual income for last year was .. Cabal Products is a division of a major corporation. (Note: Round all answers to two decimal places.) A. The residual income approach is the measurement of the net income that an investment, A: a. The company's minimum required rate of return is 14%. (Round your answers to four significant digits.) Identify the articles that correctly complete the following sentence. Dacker Products is a division of a major corporation. Eber Wares is a division of a major corporation. Compute average operating assets. Small AppliancesDivision (2) A batch of sugar beets costs $60 to buy from farmers and $19 to crush in the company's plant. 2. Numerator In year 3 the company would have to incur one-time renovation expenses of $96,000. A high, A: Return on Investment in terms of Margin and Turnover: Residual income is the income earned, A: Residual income = Operating income - Minimum required return If expenses could be reduced by 3,450,000 without decreasing sales, what would be the impact on the profit margin, investment turnover, and return on investment for the Consumer Products Division? The minimum, A: Formula; =$1,738,080$6,000,000=28.97%, A: Division return on investment = Net profit / Average total assets The following data are for the most recent year of operations: Sales$ 37,880,000Net operating income$ 3,508,960Average operating assets$ 9,400,000The company's minimum required rate of return14% The division's residual income is closest to: Residual income = Operating income - (Operating assets * Required Our experts can answer your tough homework and study questions.

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