Campbell Technologies, Inc. has three divisions. Campbell has a desired rate of return of 13.0 percent. The operating assets andincome for each division are as follows:THIOperatingOperatingDivisionsAssetsIncome$ 99,76098,60058,000Printer$580,000850,000400,000CopierFaxTotal$1,830,000$256,360Campbell headquarters has $124,000 of additional cash to invest in one of its divisions. The division managers have identifiedinvestment opportunities that are expected to yield the following ROls:Expected ROIS forAdditional InvestmentsDivisionsPrinter14.5%Copier13.5%Fax12.5%Requireda-1. Calculate the ROI for each division.a-2. Which division manager is currently producing the highest ROI?b. Based on ROI, which division manager would be most eager to accept the $124,000 of investment funds?c. Based on ROI, which division manager would be least likely to accept the $124,000 of investment funds?d. Which division offers the best investment opportunity for Campbell?g. Calculate the residual income:(1) At the corporate (headquarters) level before the additional investment.(2) At the division level before the additional investment.(3) At the investment level.(4) At the division level after the additional investment.Complete this question by entering your answers in the tabs below.Req A1Req A2 to DReq G1Req G2 to G4Calculate the residual income at the corporate (headquarters) level before the additional investment.Residual income< Req A2 to DReq G2 to G4 >

In this question, we have to compute ROI for each division by dividing operating income by operating…

Answered: Operating Oper Lvisions =inter pier…

Operating Oper Lvisions =inter pier Assets Inc $ 580,000 850,000 400,000 $ 99 98 58 Total $1,830,000 $256 npbell headquarters has $124,00C

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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Campbell Technologies, Inc. has three divisions. Campbell has a desired rate of return of 13.0 percent. The operating assets and income for each division are as follows: Operating Operating Divisions Assets Income 580,000 850,000 400,000 $ 99,760 98,600 58,000 Printer $ Сopier Fax Total $1,830,000 $256,360 Campbell headquarters has $124,000 of additional cash to invest in one of its divisions. The division managers have identified investment opportunities that are expected to yield the following ROls: Expected ROIS for Additional Investments Divisions Printer 14.5% Copier 13.5% Fax 12.5% Required a-1. Calculate the ROI for each division. a-2. Which division manager is currently producing the highest ROI? b. Based on ROI, which division manager would be most eager to accept the $124,000 of investment funds? c. Based on ROI, which division manager would be least likely to accept the $124,000 of investment funds? d. Which division offers the best investment opportunity for Campbell? g.…
Altoona Technologies, Inc. (ATI) has three divisions. ATI has a desired rate of return of 12.5 percent. The operating assets and income for each division are as follows: Operating Operating Divisions Assets Income $ 96,000 90,000 Printer $ 540,000 810,000 360,000 Сopier Fax 54,000 Total $1,710,000 $240,000 ATI headquarters has $120,000 of additional cash to invest in one of its divisions. The division managers have identified investment opportunities that are expected to yield the following ROls: Expected ROIS for Divisions Additional Investments Printer 14.0% Сopier 13.0% Fax 12.0% Required a-1. Calculate the ROI for each division. a-2. Which division manager is currently producing the highest ROI? b. Based on ROI, which division manager would be most eager to accept the $120,000 of investment funds? c. Based on ROI, which division manager would be least likely to accept the $120,000 of investment funds? d. Which division offers the best investment opportunity for ATI? g. Calculate…
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The following data relate to the Motor Division of Young Company:Sales P10,000,000Variable costs 3,000,000Direct fixed costs 5,000,000Invested capital 8,000,000Allocated actual interest costs 800,000Capital charge 12%Question: What is the divisional return on investment?
Shaq Company operates with three segments: Louisiana, Orlando, and Los Angeles.Data regarding these segments is as follows: LouisianaSegment OrlandoSegment Los AngelesSegment Contribution to indirect expenses $328,500 $207,600 $155,500 Assets directly used & identified with segment $1,858,700 $1,410,000 $742,600 1. Calculate the return on investment for each segment. Rank them from highest to lowest. Round percent to 1 decimal place. LouisianaSegment OrlandoSegment Los AngelesSegment Segment Net Income Investment base (assets) ROI (%) Rankings (1,2, or 3, where 1 is the best) 2. Assume the cost of capital is 14% for a segment. Calculate residual income for each segment. Rank them from highest to lowest. Round percent to 1 decimal place. LouisianaSegment OrlandoSegment Los AngelesSegment Segment Net Income Investment base (assets) Cost of Capital (%) Minimum Income Residual Income…
Use the following information for the Problems below: The following data pertain to three divisions of Nevada Aggregates, Incorporated. The company's required rate of return on invested capital is 8 percent. Sales revenue Income Average investment Sales margin k Capital turnover ROI Residual income Division A ? Division B Division C $ 11,000,000 ? $ 550,000 $ 2,160,000 ? ? $ 2,610,000 ? 20% ? 25% 3 ? ? ? ? 20% ? ? $ 130,000 Required: The following data pertain to three divisions of Nevada Aggregates, Incorporated. The company's required rate of return on invested capital is 8 percent. Note: Round "Capital turnover" answers to 2 decimal places. Division A Division B Division C Sales revenue Income S 40,700,000 $ 1,840,000 $ 8,140,000 Average investment $ 10,175,000 + Sales margin 20 % % 25 % Capital turnover ROI Residual income 1.00 % % 20 % $ 489,000