3. Data $ 72,000,000 $ 3,600,000 $ 18,000,000 Sales Net operating income Average operating assets 6. Minumum required rate of retur 24% If your formulas are correct, you should get the correct answers to the following questions. a. What is the ROI? ROI % b. What is the residual income? (N~qative amount should be indicated by a minus sign.) Residual income c. Why is the residual income negative? 4. 5. 7.

3. Data $ 72,000,000 $ 3,600,000 $ 18,000,000 Sales Net operating income Average operating assets 6. Minumum required rate of retur 24% If your formulas are correct, you should get the correct answers to the following questions. a. What is the ROI? ROI % b. What is the residual income? (N~qative amount should be indicated by a minus sign.) Residual income c. Why is the residual income negative? 4. 5. 7.

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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Please answer 2.4 and 2.5
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B. Calculate the profit margin, return on investment, and residual income. Assume an investment base of $100,000 and 6% cost of capital. Round your percentage answers to one decimal place. Profit margin Return on investment Residual income 2.20 a ✓ % 4.2 ✓ % C. Which of the following statements is correct? Uncontrollable costs are included in the income statement because a. these costs ultimately affect each division. b. these costs are the responsibility of each division manager. c. these costs are non-recurring. d. these costs are head office's responsibility.
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Subject: acounting
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