USE FORMULA TO ANSWER THE QUESTION FOR EXAMPLE =B1+B2 THAN GIVE THE ASWER 32 SKIP FIRST TWO I NEED 25 - 33PLEASE SHOW ME FORMULA. DEF1 Adams Corporation evaluates divisional managers based on ROI. Operating results for the2 company's Northern Division for last year are given below:34Sales27,000,00015Variable expenses16,200,0006Contribution margin10,800,000Fixed expenses8,805,000Net operating income1.995.00010Average divisional operating assets9.500.0001112 The Northern Division has an opportunity to add a new product line at the beginning of the year as follows:1314Average required investment2,500,00015Net operating income400,0001617 Adams Corporation's minimum acceptable rate of return15%1819 Assuming the company accepts all projects that meet or exceed the minimum rate of return, compute the following:2021 Northern Division ROI for last year2223 Northern Division ROI if new product line is added24Sheet1+)READY100% E21ABDE14Average required investmentNet operating income2,500,00015400,0001617 Adams Corporation's minimum acceptable rate of return15%1819 Assuming the company accepts all projects that meet or exceed the minimum rate of return, compute the following:2021 Northern Division ROI for last year2223 Northern Division ROI if new product line is added2425 Write an IF statement to determine whether the Northern Division26 manager will ACCEPT or REJECT the new product line based on ROI.2728 Northern Division residual income for last year2930 Northern Division residual income if the new product line is added3132 Write an IF statement to determine whether the Northern Division manager33 will ACCEPT or REJECT the new product line based on residual income34353637Sheet1...READY100%

ROI stands for return on investment that shows the return earned by the company on the investment. 25. Northern Division ROI if new product line is added =($1995000+$400000)($9500000+$2500000) =19.96% The manager would accept the new product because the ROI for a new product with 19.96% is higher than the minimum acceptable ROI of 15%. 28. Northern Division residual income for last year=Department's net operating income -(Minimum required return on assets ×Average operating assets of the department) =$1995,000-($9500,000×15%) =$570,000 30. Residual income for new product line=(Net operating income for last year+Net operating income, beginning) -Average divisional operating asset +(Average requred investment×Minimum acceptable rate of return) =($1995,000+$400,000)-[($9500,000+$2500,000*15%] = $2395,000-($12000,000*15%) =$2395,000- $1800,000 = $595,00033. The residual income for the last year is $570,000 and the residual income for the new product line is $595,000 that is higher than the last year. Therefore, the manager should accept the new product line.

Business

Accounting

1 Adams Corporation evaluates divisional managers based on ROI. Operating results for the company's Northern Division for last year are given below: Sales 27,000,000 Variable expenses Contribution margin 16,200,000 10,800,000 7. Fixed expenses 8,805,000 Net operating income 1.995.000 Lo Average divisional operating assets 9,500,000 %24 %24

1 Adams Corporation evaluates divisional managers based on ROI. Operating results for the company's Northern Division for last year are given below: Sales 27,000,000 Variable expenses Contribution margin 16,200,000 10,800,000 7. Fixed expenses 8,805,000 Net operating income 1.995.000 Lo Average divisional operating assets 9,500,000 %24 %24

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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