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It is the end of the third quarter, and Margaret is evaluating the performance of two key divisions in the company. Both $54,000 cash available for investment in the fourth quarter, so Margaret is now analyzing each division before a potential investme She has gathered the following condensed income statements and selected information from the balance sheet for each division. T company's minimum required rate of return is 10%, while its weighted average cost of capital is 9%. Its effective tax rate is 25% Sales COGS Gross margin Operating expenses Operating income Operating assets Total assets East $830,000 440,000 $390,000 344,000 $46,000 West $1,300,000 760,000 $540,000 494,000 $46,000 $800,000 $500,000 $1,100,000 $740,000 000

It is the end of the third quarter, and Margaret is evaluating the performance of two key divisions in the company. Both $54,000 cash available for investment in the fourth quarter, so Margaret is now analyzing each division before a potential investme She has gathered the following condensed income statements and selected information from the balance sheet for each division. T company's minimum required rate of return is 10%, while its weighted average cost of capital is 9%. Its effective tax rate is 25% Sales COGS Gross margin Operating expenses Operating income Operating assets Total assets East $830,000 440,000 $390,000 344,000 $46,000 West $1,300,000 760,000 $540,000 494,000 $46,000 $800,000 $500,000 $1,100,000 $740,000 000

FINANCIAL ACCOUNTING
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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(b) The parts of this question must be completed in order. This part will be available when you complete the part above (c) The parts of this question must be completed in order. This part will be available when you complete the part above
Transcribed Image Text:(b) The parts of this question must be completed in order. This part will be available when you complete the part above (c) The parts of this question must be completed in order. This part will be available when you complete the part above
It is the end of the third quarter, and Margaret is evaluating the performance of two key divisions in the company. Both divisions had $54,000 cash available for investment in the fourth quarter, so Margaret is now analyzing each division before a potential investment. She has gathered the following condensed income statements and selected information from the balance sheet for each division. The company's minimum required rate of return is 10%, while its weighted average cost of capital is 9%. Its effective tax rate is 25% Sales COGS Gross margin Operating expenses Operating income Ch 17: Homewor Operating assets Total assets ow Transcribed Text Question 5 of 10 (a) ROI RI EVA $ East $ $830,000 440,000 $390,000 344,000 $46,000 $800,000 $1.100,000 West Calculate the current ROI, RI, and EVA for each division through the third quarter. For ROI purposes, operating assets are considered investments. (Enter ROI as a decimal, not as a percentage. Round ROI to 4 decimal places, e.g. 0.1526. Enter negative amounts with either a-sign e.g.-15,000 or in parenthesis e.g. (15,000).) East $1,300,000 760,000 $540,000 494,000 $46,000 $500,000 $740,000 $54.000 $ $ 52°F West A
Transcribed Image Text:It is the end of the third quarter, and Margaret is evaluating the performance of two key divisions in the company. Both divisions had $54,000 cash available for investment in the fourth quarter, so Margaret is now analyzing each division before a potential investment. She has gathered the following condensed income statements and selected information from the balance sheet for each division. The company's minimum required rate of return is 10%, while its weighted average cost of capital is 9%. Its effective tax rate is 25% Sales COGS Gross margin Operating expenses Operating income Ch 17: Homewor Operating assets Total assets ow Transcribed Text Question 5 of 10 (a) ROI RI EVA $ East $ $830,000 440,000 $390,000 344,000 $46,000 $800,000 $1.100,000 West Calculate the current ROI, RI, and EVA for each division through the third quarter. For ROI purposes, operating assets are considered investments. (Enter ROI as a decimal, not as a percentage. Round ROI to 4 decimal places, e.g. 0.1526. Enter negative amounts with either a-sign e.g.-15,000 or in parenthesis e.g. (15,000).) East $1,300,000 760,000 $540,000 494,000 $46,000 $500,000 $740,000 $54.000 $ $ 52°F West A
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