d Houghton Chemicals, which started operations one year ago, has two divisions: Alloys and Petro. Both divisions invest heavily in R&D, which is assumed to generate benefits for five years. R&D spending is made uniformly throughout the year. Houghton Chemicals has a cost of capital of 11 percent. Selected financial information for the two divisions (in thousands of dollars) for the year just completed follows: Sales revenue Divisional income Divisional investment Current liabilities R&D Alloys $ 8,200 857 380 280 LE Petro $ 6,300 1,025 7,800 280 6,350 240 Required: Evaluate the performance of the two divisions assuming Houghton Chemicals uses economic value added (EVA). Note: Enter your answers in thousands of dollars rounded to 1 decimal place. EVA of Alloys division $ 154.1 x EVA of Petro division $ 189.0 x Which division performed better? The Petro division performed better

d Houghton Chemicals, which started operations one year ago, has two divisions: Alloys and Petro. Both divisions invest heavily in R&D, which is assumed to generate benefits for five years. R&D spending is made uniformly throughout the year. Houghton Chemicals has a cost of capital of 11 percent. Selected financial information for the two divisions (in thousands of dollars) for the year just completed follows: Sales revenue Divisional income Divisional investment Current liabilities R&D Alloys $ 8,200 857 380 280 LE Petro $ 6,300 1,025 7,800 280 6,350 240 Required: Evaluate the performance of the two divisions assuming Houghton Chemicals uses economic value added (EVA). Note: Enter your answers in thousands of dollars rounded to 1 decimal place. EVA of Alloys division $ 154.1 x EVA of Petro division $ 189.0 x Which division performed better? The Petro division performed better

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter10: Decentralization: Responsibility Accounting, Performance Evaluation, And Transfer Pricing

Section: Chapter Questions

Problem 1CE: Forchen, Inc., provided the following information for two of its divisions for last year: Required:...

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Houghton Chemicals, which started operations one year ago, has two divisions: Alloys and Petro. Both divisions invest heavily in R&D, which is assumed to generate benefits for five years. R&D spending is made uniformly throughout the year. Houghton Chemicals has a cost of capital of 11 percent. Selected financial information for the two divisions (in thousands of dollars) for the year just completed follows: Sales revenue Divisional income. Divisional investment Current liabilities R&D Alloys $ 7,400 777 5,550 160 200 EVA of Alloys division EVA of Petro division Which division performed better? Petro $ 5,500 945 7,000 200 300 Required: Evaluate the performance of the two divisions assuming Houghton Chemicals uses economic value added (EVA). Note: Enter your answers in thousands of dollars rounded to 1 decimal place. The Petro division performed better
Evaluate the performance of the two divisions assuming UEI uses return on investment (ROI).
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Coolbrook company has the following information available for the past year:(Chart in photo below) Required:1. calculate return on Investment (ROI) and residual income for each divison for the last year2. Recalculate ROI and residual income for the division for each independent situration that follows:a.) operating income increases by 9 percentb.) operating Income decreases by 9 percentc.) The company invests 255,000 in each division, an amount that generates 106,000 additional income per division.d.) Coolbrook changes its hurdle rate to 5.26 percent
Please see picture for the full problem and table. a-1. Evaluate the performance of the two divisions assuming BMI uses return on investment (ROI). (Round your final answers to nearest whole percentage value.)
Subject:- finance
Subject: accounting
Carter Paint Company has plants in four provinces. Sales last year were $100 million, and the balance sheet year-end is similar in percent of sales to that of previous years (and this will continue in the future). All assets and current liabilities will vary directly with sales. Assume the firm is already using capital assets at full capacity. Assets Cash Accounts receivable Inventory Current assets Capital assets Total assets Assets (Click to select) (Click to select) (Click to select) Current assets (Click to select) Total assets The firm has an aftertax profit margin of 9 percent and a dividend payout ratio of 35 percent. a. If sales grow by 20 percent next year, determine how many dollars of new are needed to finance the expansion. (Do not round intermediate calculations. Enter the answer in millions. Round the final answer to 3 decimal places.) The firm needs $ Current ratio Total debt / assets b. Prepare a pro forma balance sheet with any financing adjustment made to long-term…
During the current year, Sokowski Manufacturing earned income of $327,600 from total sales of $5,040,000 and average capital assets of $12,000,000. A. Based on this information, calculate asset turnover. If required, round your answer to two decimal places. times B. Assume sales margin is 6.5%, what is the total ROI for the company during the current year?. If required, round your answer to one decimal place. %
Barrel Enterprises has two divisions, East Division and West Division. In Year 1, the West Division reports a return on investment of 10% and sales of $410,000. In Year 2, the West Division reports a return on investment of 24%, operating income of $108,800, and a turnover of 1.50. The West Division's margin in Year 2 is 125% of its margin in Year 1. What is the West Division's operating income in Year 1? Round to the nearest whole dollar and do not enter a dollar sign or a decimal point (e.g., enter 89, not $89.00).
Carter Paint Company has plants in four provinces. Sales last year were $100 million, and the balance sheet at year-end is similar in percent of sales to that of previous years (and this will continue in the future). All assets and current liabilities will vary directly with sales. Assume the firm is already using capital assets at full capacity. Cash Accounts receivable Inventory Current assets Capital assets Total assets Assets Cash Accounts receivable Inventory Current assets Capital Assets Total assets Assets Current ratio Total debt assets ta $7 13 18 38 38 $76 $ Year 1 Balance Sheet (in $ millions) Accounts payable Accrued wages Accrued taxes X Liabilities and shareholders' Equity Current liabilities Long-term debt Common stock Retained earnings Total liabilities and shareholders' equity The firm has an aftertax profit margin of 6 percent and a dividend payout ratio of 30 percent. a. If sales grow by 10 percent next year, determine how many dollars of new funds are needed to…
Owen's Electronics has nine operating plants in seven southwestern states, Sales for last year were $100 million, and the balance sheet at year-end is similar in percentage of sales to that of previous years (and this will continue in the future). All assets (including fixed assets) and current liabilities will vary directly with sales. The firm is working at full capacity. Cash Accounts receivable Inventory Current assets Fixed assets Assets Total #ssets New funds Balance Sheet (in 3 millions) 56 Accounts payable ****1 Liabilities and Stockholders Equity 24 Accrued wages 27 Accrued taxes $ 57 Notes payable Common stock Retained earnings $ 101 Total liabilities and stockholders' equity Owen's Electronics has an aftertax profit margin of 9 percent and a dividend payout ratio of 40 percent. If sales grow by 15 percent next year, determine how many dollars of new funds are needed to finance the growth. Note: Do not round intermediate calculations. Enter your answer in dollars, not…