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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 16,200,000 Contribution margin 10,800,000 Fixed expenses 8,805,000 Net operating income 1.995.000 Average divisional operating assets 9,500,000

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 16,200,000 Contribution margin 10,800,000 Fixed expenses 8,805,000 Net operating income 1.995.000 Average divisional operating assets 9,500,000

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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A. B C. D. Adams Corporation evaluates divisional managers based on ROl. Operating results for the 2company's Northern Division for last year are given below: 4 Sales 27,000,000 Variable expenses 16,200,000 Contribution margin 10,800,000 Fixed expenses 8,805,000 1995.000 Net operating income 10 Average divisional operating assets 9.500.000 11 12 The Northern Division has an opportunity to add a new product line at the beginning of the year as follows: 13 14 Average required investment Net operating income) 2,500,000 15 400,000 15 Adams Corporation's minimum acceptable rate of return 15% 18 19 Assuming the company accepts all projects that meet or exceed the minimum rate of return, compute the following: 20 21 Northern Division ROi for last year 22 23 Northern Division ROI if new product line is added 24 Sheet1 ... READY 田回凹 100% %24 重
Transcribed Image Text:A. B C. D. Adams Corporation evaluates divisional managers based on ROl. Operating results for the 2company's Northern Division for last year are given below: 4 Sales 27,000,000 Variable expenses 16,200,000 Contribution margin 10,800,000 Fixed expenses 8,805,000 1995.000 Net operating income 10 Average divisional operating assets 9.500.000 11 12 The Northern Division has an opportunity to add a new product line at the beginning of the year as follows: 13 14 Average required investment Net operating income) 2,500,000 15 400,000 15 Adams Corporation's minimum acceptable rate of return 15% 18 19 Assuming the company accepts all projects that meet or exceed the minimum rate of return, compute the following: 20 21 Northern Division ROi for last year 22 23 Northern Division ROI if new product line is added 24 Sheet1 ... READY 田回凹 100% %24 重
E21 A D. E F 14 Average required investment Net operating income 2,500,000 15 400,000 16 17 Adams Corporation's minimum acceptable rate of return 15% 18 19 Assuming the company accepts all projects that meet or exceed the minimum rate of return, compute the following: 20 21 Northern Division ROl for last year 22 23 Northern Division ROl if new product line is added 24 25 Write an IF statement to determine whether the Northern Division 26 manager will ACCEPT or REJECT the new product line based on ROI. 27 28 Northern Division residual incomne for last year 29 30 Northern Division residual income if the new product line is added 31 32 Write an IF statement to determine whether the Northern Division manager 33 will ACCEPT or REJECT the new product line based on residual income 34 35 36 37 Sheet1 READY 100% 黑
Transcribed Image Text:E21 A D. E F 14 Average required investment Net operating income 2,500,000 15 400,000 16 17 Adams Corporation's minimum acceptable rate of return 15% 18 19 Assuming the company accepts all projects that meet or exceed the minimum rate of return, compute the following: 20 21 Northern Division ROl for last year 22 23 Northern Division ROl if new product line is added 24 25 Write an IF statement to determine whether the Northern Division 26 manager will ACCEPT or REJECT the new product line based on ROI. 27 28 Northern Division residual incomne for last year 29 30 Northern Division residual income if the new product line is added 31 32 Write an IF statement to determine whether the Northern Division manager 33 will ACCEPT or REJECT the new product line based on residual income 34 35 36 37 Sheet1 READY 100% 黑
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