Cabell Products is a division of a major corporation. 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 company'sminimum required rate of return is 13%.The division's residual income is closest to:Multiple Cholce$686.400$374.088$(624.624)S998.712< Prev5 of 7Next >65°F Cloudyto searchDELLIT

RESIDUAL INCOME IS TYPICALLY USED TO ASSESS THE PERFORMANCE OF CAPITAL INVESTMENT , TEAM ,…

Answered: Cabell Products is a division of a…

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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Best Sleep Company reported the following results from last year's operations: Sales $ 1,500,000 Variable expenses 650,000 Contribution margin 850,000 Fixed expenses 580,000 Net operating income $ 270,000 Average operating assets $ 1,000,000 At the beginning of this year, the company has a $160,000 investment opportunity with the following cost and revenue characteristics: Sales Contribution margin ratio Fixed expenses $ 240,000 70 % of sales $ 144,000 The company's minimum required rate of return is 10%. What is the ROI related to this year's investment opportunity?
Lasky Manufacturing has two divisions: Carolinas and Northeast. Lasky has a cost of capital of 7.5 percent. Selected financial information (in thousands of dollars) for the first year of business follows: Carolinas Northeast Sales revenue $ 900 $ 4,200 Income 170 372 Divisional assets (beginning of year) 1,000 1,500 Current liabilities (beginning of year) 170 170 R&D expendituresa 450 370 aR&D is assumed to benefit two periods. All R&D is spent at the beginning of the year. Required: a-1. Evaluate the performance of the two divisions assuming Lasky Manufacturing uses economic value added (EVA). a-2. Which division had the better performance?
Dukelow Corporation has two divisions: the Governmental Products Division and the Export Products Division. The Governmental Products Division's divisional segment margin is $37,300 and the Export Products Division's divisional segment margin is $89,700. The total amount of common fixed expenses not traceable to the individual divisions is $100,400. What is the company's net operating income (loss)? Multiple Choice $227,400 $127,000 $26,600 ($127,000)
The Consumer Division of Lewandowski Company has income from operations of $93,950 and assets of $367,000. The minimum acceptable return on assets is 8%. What is the residual income for the division?$fill in the blank 1
Fernstrom Corporation has two divisions: East and West. Data from the most recent month appear below: Sales. Variable expenses Traceable fixed expenses Multiple Choice The company's common fixed expenses total $52,140. If the company operates at exactly the break-even sales of the East Division and West Division, what would be the company's overall net operating income? $0 East $330,000 $132,000 $140,000 ($235,140) West $144,000 $ 76,320 $ 43,000
The Casket Division of Saal Corporation had average operating assets of $1,020,000 and net operating income of $205,200 in January. The company uses residual income to evaluate the performance of its divisions, with a minimum required rate of return of 14%. Required: What was the Casket Division's residual income in January?
Concord Company earned a controllable margin of $125000 on sales of $1607000. The division had average operating assets of $1293000. The company requires a return on investment of at least 7%. How much is residual income? O $34490 O $159490 O $90510 O $112490
Residual Income The Commercial Division of Galena Company has operating income of $264,070 and assets of $549,000. The minimum acceptable return on assets is 13%. What is the residual income for the division?
Assume division 1 of the XYZ Company had the following results last year (in thousands) Management's required rate of return is 81% and the weighted average cost of capital is 6% Its effective tax rate is 30% Sales$ 9,000,000 Operating expenses $ 1,200,000 Operating income $1,500,000 Total revenue$ 2,000,000 Total assets $ 12,000,000 Current liabilities$ 5,000,000 What is the division's residual income? $100,000 $200,000 $500, 000 $ 540,000 Assume division 1 of the XYZ Company had the following results last year (in thousands). Management's required rate of return is 8% and the weighted average cost of capital is 6% effective tax rate is 30% . \table [[Sales, $9, 000, 000
Imagination Corporation uses residual income to evaluate the performance of its divisions. Imagination's minimum required rate of return is 10%. In April, the Commercial Products Division had average operating assets of $105,000 and net operating income of $9,700. What was the Commercial Products Division's residual income in April? Multiple Choice $970. $(970). $800. $(800).
Assume the Hiking Shoes division of the Simply Shoes Company had the following results last year (in thousands). Management's target rate of return is 30% and the weighted average cost of capital is 5%, its effective tax rate is 35%. Sales Operating income Total assets Current liabilities What is the division's Residual Income (RI)? ⒸA. $280,000 OB. $1,750,000 OC. $800,000 OD. $1,800,000 $5,000,000 2,000,000 4,000,000 840,000
What is the investment turnover?

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