Crude Company has 2
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Crude Company has 2 product lines - product lines are considered an investment center
Average
Product Line Sales Net Income Invested Assets
Toy train sets $500,000 $300,000 $1,200,000
Toy airplanes $400,000 $280,000 $1,000,000
Compute
Compute return on investment for Toy airplanes product line. Write as a whole number
Using return on investment, which product line is most efficient at using assets to generate returns for the company?
Compute Residual Income for Toy Train sets. Report the amount in dollars
Compute Residual Income for Toy Airplanes. Report the amount in dollars
Which product line generated the most residual income for the company?
Compute profit margin for Toy Train set product line. Report the percentage as a whole number
Which product line generated the most net income per dollar of sales?
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