Sales Operating income Invested capital $8,100,000 648,000 9,000,000 In an effort to make something out of nothing and to salvage the current year's performance, Washburn was contemplating implementation of some or all of the following four strategies: a. Write off and discard $102,000 of obsolete inventory. The company will take a loss on the disposal. b. Accelerate the collection of $132,000 of overdue customer accounts receivable. c. Stop advertising through year-end and drastically reduce outlays for repairs and maintenance. These actions are expected to save the division $237,000 of expenses and will conserve cash resources. d. Acquire two competitors that are expected to have the following financial characteristics: Projected Operating Expenses $3,330, 000 6,350,000 Projected Invested Capital $11,750, 000 8,000,000 Projected Sales Anderson Manufacturing Palm Beach Enterprises $4,740,000 6,990,000
Sales Operating income Invested capital $8,100,000 648,000 9,000,000 In an effort to make something out of nothing and to salvage the current year's performance, Washburn was contemplating implementation of some or all of the following four strategies: a. Write off and discard $102,000 of obsolete inventory. The company will take a loss on the disposal. b. Accelerate the collection of $132,000 of overdue customer accounts receivable. c. Stop advertising through year-end and drastically reduce outlays for repairs and maintenance. These actions are expected to save the division $237,000 of expenses and will conserve cash resources. d. Acquire two competitors that are expected to have the following financial characteristics: Projected Operating Expenses $3,330, 000 6,350,000 Projected Invested Capital $11,750, 000 8,000,000 Projected Sales Anderson Manufacturing Palm Beach Enterprises $4,740,000 6,990,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
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Sales
Operating income
Invested capital
$8,100,000
648,000
9,000,000
In an effort to make something out of nothing and to salvage the current year's performance, Washburn was
contemplating implementation of some or all of the following four strategies:
a. Write off and discard $102,000 of obsolete inventory. The company will take a loss on the disposal.
b. Accelerate the collection of $132,000 of overdue customer accounts receivable.
c. Stop advertising through year-end and drastically reduce outlays for repairs and maintenance. These actions are
expected to save the division $237,000 of expenses and will conserve cash resources.
d. Acquire two competitors that are expected to have the following financial characteristics:
Projected
Sales
Projected Operating
Expenses
$3,330,000
6,350,000
Projected Invested
Capital
$11,750, 000
8,000,000
Anderson Manufacturing
Palm Beach Enterprises
$4,740, 000
6,990, 000
Required:
1-a. Define sales margin, capital turnover, and return on investment.
1-b. Compute sales margin, capital turnover, and return on investment for the Reliable's Sporting Goods Division over the past nine
months.
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