Johnson Company has two sources of funds: long-term debt and equity capital. Johnson Company has profit centers in the following locations with the following net incomes and total assets: Las Vegas Dallas Tampa Net Income Assets $960,000 $4,000,000 1,200,000 8,000,000 2,040,000 12,000,000 a. Calculate ROI for each profit center and rank them from highest to lowest based on ROI. Round ROI to the nearest whole percentage. ROI Rank Las Vegas Dallas 96 96 " % 수 Tampa b. Calculate residual income for each profit center based on a desired ROI of 5% and rank them from highest to lowest based on residual income. RI Las Vegas $ Dallas Tampa Check Rank

Johnson Company has two sources of funds: long-term debt and equity capital. Johnson Company has profit centers in the following locations with the following net incomes and total assets: Las Vegas Dallas Tampa Net Income Assets $960,000 $4,000,000 1,200,000 8,000,000 2,040,000 12,000,000 a. Calculate ROI for each profit center and rank them from highest to lowest based on ROI. Round ROI to the nearest whole percentage. ROI Rank Las Vegas Dallas 96 96 " % 수 Tampa b. Calculate residual income for each profit center based on a desired ROI of 5% and rank them from highest to lowest based on residual income. RI Las Vegas $ Dallas Tampa Check Rank

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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What is the Rate of Return on Investment (ROI) for Stevenson Corporation, given the following info: Invested Assets = $275,000 Sales $330,000 Income from Operations = $49,500 Desired minimum rate of return = 7.5% O 10.0% 18.0% 8.0% 7.5%
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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
Subject:- finance