Luke Company has three divisions: Peak, View, and Grand. The company has a hurdle rate of 6.01 percent. Selected operating data for the three divisions follow: Peak View Grand $ 333,000 $ 233,000 $ 303,000 110, 000 Sales revenue Cost of goods sold Miscellaneous operating expenses Average invested assets 200,000 39,000 1,210, 000 38,000 960, 000 201,000 32,000 1,035,000 Required: 1. Compute the return on investment for each division. 2. Compute the residual income for each division. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the return on investment for each division. (Enter your ROI answers as a percentage rounded to two decimal places, (i.e., 0.1234 should be entered as 12.34%.)) Peak View Grand Return on Investment % % %

Luke Company has three divisions: Peak, View, and Grand. The company has a hurdle rate of 6.01 percent. Selected operating data for the three divisions follow: Peak View Grand $ 333,000 $ 233,000 $ 303,000 110, 000 Sales revenue Cost of goods sold Miscellaneous operating expenses Average invested assets 200,000 39,000 1,210, 000 38,000 960, 000 201,000 32,000 1,035,000 Required: 1. Compute the return on investment for each division. 2. Compute the residual income for each division. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the return on investment for each division. (Enter your ROI answers as a percentage rounded to two decimal places, (i.e., 0.1234 should be entered as 12.34%.)) Peak View Grand Return on Investment % % %

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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Luke Company has three divisions: Peak, View, and Grand. The company has a hurdle rate of 6.26 percent. Selected operating data for the three divisions follow: Peak Sales revenue $ 339,000 Cost of goods sold 209,000 Miscellaneous operating expenses Average invested assets 42,000 1,320,000 View $ 230,000 108,000 39,000 950,000 Grand $ 305,000 188,000 35,000 1,185,000 Required: 1. Compute the return on investment for each division. 2. Compute the residual income for each division. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the residual income for each division. Note: Loss amounts should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to nearest whole dollar. Peak View Grand Residual Income (Loss)
Luke Company has three divisions: Peak, View, and Grand. The company has a hurdle rate of 5.01 percent. Selected operating data for the three divisions follow: Peak View Grand Sales revenue $ 337,000 $ 223,000 $ 310,000 Cost of goods sold 210,000 119,000 192,000 Miscellaneous operating expenses 42,000 32,000 35,000 Average invested assets 1,370,000 870,000 1,135,000 Required:1. Compute the return on investment for each division.2. Compute the residual income for each division.
Luke Company has three divisions: Peak, View, and Grand. The company has a hurdle rate of 6.51 percent. Selected operating data for the three divisions follow: Peak View Grand Sales revenue $ 342,000 $ 230,000 $ 312,000 Cost of goods sold 202,000 108,000 199,000 Miscellaneous operating expenses 43,000 37,000 37,000 Average invested assets 1,350,000 930,000 1,095,000 Required:1. Compute the return on investment for each division. (Enter your ROI answers as a percentage rounded to two decimal places, (i.e., 0.1234 should be entered as 12.34%.))2. Compute the residual income for each division. (Loss amounts should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to nearest whole dollar.)
S Wescott Company has three divisions: A, B, and C. The company has a hurdle rate of 8 percent. Selected operating data for the three divisions are as follows: Sales revenue Cost of goods sold Miscellaneous operating expenses Interest and taxes 23 Average invested assets Division A Division B Division C $ 1,290,000 $ 1,053,000 $ 1,052,000 797,000 71,000 55,000 9,511,000 773,000 59,000 48,000 2,259,000 764,000 60,000 48,000 3,716,000 Wescott is considering an expansion project in the upcoming year that will cost $5.7 million and return $521,000 per year. The project would be implemented by only one of the three divisions. Required: 1. Compute the ROI for each division. 2. Compute the residual income for each division. 3. Rank the divisions according to the ROI and residual income of each. 4-a. Compute the return on investment on the proposed expansion project. 4-b. Is this an acceptable project? 5. Without any additional calculations, state whether the proposed project would increase or…
The sales, income from operations, and invested assets for each division of Wren Company are as follows: Income from Invested Sales Operations Assets Division C $5,000,000 $630,000 $4,000,000 Division D 6,800,000 760,000 3,900,000 Division E 3,750,000 750,000 7,500,000 Management has established a minimum rate of return for invested assets of 10%. Do Not Use Commas or $ in Your Answers What is the Residual Income for Division C? What is the Residual Income for Division D? What is the Residual Income for Division E? Based on Residual Income, Division is the most profitable.
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Warren Company has two divisions with the following results: Sales revenue Divisional expenses Segment income Average invested assets Erie $ 1,260,000 856,000 Ashland $ 456,000 276,000 $ 180,000 $ 1,260,000 $ 4,060,000 $ 356,000 Warren Company has a hurdle rate of 12.6 %. Required: a. Calculate the return on investment for each division. b. Break each division's return on investment down into its component parts using the DuPont method. c. Calculate the residual income for each division. Complete this question by entering your answers in the tabs below. Required A Required B Required C Calculate the return on investment for each division. Note: Round your answers to 2 decimal places. Ashland Erie Investment % %
A company has the following information available for three of its divisions. COMPANY INFORMATION FOR THREE DIVISIONS Division M Investment in Assets $ 1,200,000 Division N ? Division O $ 2,500,000 Operating Income Sales Revenue ? $ 160,000 250,000 ? $ 3,200,000 ? Profit Margin Ratio 10.00% ? 6.25% Required Rate of Return 10.00% 12.50% 15.00% Return on Investment 15.00% 20.00% ? What is Division O's sales revenue? $1,666,667. $4,000,000. $2,000,000. $ 375,000.
Consider the following data for three divisions of a company, X, Y, and Z: Divisional: X Y Z Sales $ 1,486,000 $ 830,000 $ 4,503,000 Operating Income 208,700 126,600 286,600 Investment in assets 517,200 493,700 3,788,900 The return on sales (ROS) for Division Y is: Multiple Choice 7.6%. 14.0%. 15.3%. 25.6%. 6.4%.
Dacker Products is a division of a major corporation. The following data are for the most recent year of operations: Sales$ 37,880,000Net operating income$ 3,508,960Average operating assets$ 9,400,000The company's minimum required rate of return14% The division's residual income is closest to:
Wescott Company has three divisions: A, B, and C. The company has a hurdle rate of 8 percent. Selected operating data for the three divisions are as follows: Division A Division B Division C Sales revenue $ 1,275,000 $ 996,000 $ 986,000 Cost of goods sold 788,000 731,000 716,000 Miscellaneous operating expenses 68,000 56,000 57,000 Interest and taxes 52,000 45,000 45,000 Average invested assets 8,992,000 2,118,000 3,485,000 Wescott is considering an expansion project in the upcoming year that will cost $5.4 million and return $488,000 per year. The project would be implemented by only one of the three divisions. Required: 1. Compute the ROI for each division. 2. Compute the residual income for each division. 3. Rank the divisions according to the ROI and residual income of each. 4-a. Compute the return on investment on the proposed expansion project. 4-b. Is this an acceptable project? 5. Without any additional calculations, state whether the proposed project would…