Selected sales and operating data for three divisions of different structural engineering firms are given as follows: Division A $ 12,640,000 $ 3,160,000 $ 606,720 10. 00% Division B $ 35,800,000 $ 7,160,000 $ 608,600 Division C $ 20,640,000 $ 5,160,000 $ 577,920 11.20% Sales Average operating assets Net operating income Minimum required rate of return 10.50% Required: 1. Compute the margin, turnover, and return on investment (ROI) for each division. 2. Compute the residual income (loss) for each division. 3. Assume that each division is presented with an investment opportunity that would yield a 11% rate of return. a. If performance is being measured by ROI, which division or divisions will probably accept the opportunity? b. If performance is being measured by residual income, which division or divisions will probably accept the opportunity Complete this question by entering your answers in the tabs below. Reg 1 Req 2 Reg 3A Req 38 Compute the margin, turnover, and return on investment (ROI) for each division. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Margin Turnover ROI Division A % % Division B Division C % % % %

Selected sales and operating data for three divisions of different structural engineering firms are given as follows: Division A $ 12,640,000 $ 3,160,000 $ 606,720 10. 00% Division B $ 35,800,000 $ 7,160,000 $ 608,600 Division C $ 20,640,000 $ 5,160,000 $ 577,920 11.20% Sales Average operating assets Net operating income Minimum required rate of return 10.50% Required: 1. Compute the margin, turnover, and return on investment (ROI) for each division. 2. Compute the residual income (loss) for each division. 3. Assume that each division is presented with an investment opportunity that would yield a 11% rate of return. a. If performance is being measured by ROI, which division or divisions will probably accept the opportunity? b. If performance is being measured by residual income, which division or divisions will probably accept the opportunity Complete this question by entering your answers in the tabs below. Reg 1 Req 2 Reg 3A Req 38 Compute the margin, turnover, and return on investment (ROI) for each division. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Margin Turnover ROI Division A % % Division B Division C % % % %

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter10: Evaluating Decentralized Operations

Section: Chapter Questions

Problem 11E: The operating income and the amount of invested assets in each division of Conley Industries are as...

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The operating income and the amount of invested assets in each division of Conley Industries are as follows: a. Compute the return on investment for each division. b. Which division is the most profitable per dollar invested? Based on the data in Exercise 10 assume that management has established a 15% minimum acceptable return for invested assets. a. Determine the residual income for each division. b. Which division has the most residual income?
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Selected sales and operating data for three divisions of different structural engineering firms are given as follows: Sales Average operating assets Net operating income Minimum required rate of return Division A $ 6,300,000 $ 1,260,000 340,200 20.00% Division B $ 10,300,000 $ 5,150,000 968,200 Division C $ 9,400,000 $ 1,880,000 249,100 17.00% 2$ 2$ 18.80% Required: 1. Compute the return on investment (ROI) for each division using the formula stated in terms of margin and turnover. 2. Compute the residual income (loss) for each division. 3. Assume that each division is presented with an investment opportunity that would yield a 20% rate of return. a. If performance is being measured by ROI, which division or divisions will probably accept or reject the opportunity? b. If performance is being measured by residual income, which division or divisions will probably accept or reject the opportunity? Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3A Req 3B…
Selected sales and operating data for three divisions of different structural engineering firms are glven as follows: Division A $ 16, 200,000 $ 3,240,000 24 Division B Division C $ 26, 200,000 $ 5,240,000 Sales $ 28,960,000 Average operating assets Net operating income Minimum required rate of return 24 24 7,240,000 761,400 463,360 24 655,000 12.5e% 7.00% 7.5e% Required: 1. Compute the margin, turnover, and return on Investment (ROI) for each division. 2. Compute the residual Income (loss) for each division. 3. Assume that each division is presented with an Investment opportunity that would yleld a 8% rate of return. a. If performance is being measured by ROI, which division or divisions will probably accept the opportunity? b. If performance Is belng measured by residual Income, which division or divislons will probably accept the opportunity?
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Selected sales and operating data for three divisions of different structural engineering firms are given as follows: Division C $8,100, 000 $ 1,620, 000 $ Division A Division B Sales Average operating assets Net operating income Minimum required rate of return $ 5,000, 000 $ 1,000, 000 $ $ 9,000, 000 $4,500, 000 729,000 16.20% 205,000 109, 350 16.00% 13.00% Required: 1. Compute the return on investment (ROI) for each division using the formula stated in terms of margin and turnover. 2. Compute the residual income (loss) for each division. 3. Assume that each division is presented with an investment opportunity that would yield a 16% rate of return. a. If performance is being measured by ROI, which division or divisions will probably accept or reject the opportunity? b. If performance is being measured by residual income, which division or divisions will probably accept or reject the opportunity? Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3A Req…
Selected sales and operating data for three divisions of different structural engineering firms are given as follows: Division A $ 12,480,000 $ 3,120,000 $ 561,600 8.00% Division B Division C Sales Average operating assets Net operating income Minimum required rate of return $ 28,480,000 $ 7,120,000 $ 512,640 $ 20,480, 000 $ 5,120,000 $ 532,480 10.40% 8.50% Required: 1. Compute the margin, turnover, and return on investment (ROI) for each division. 2. Compute the residual income (loss) for each division. 3. Assume that each division is presented with an investment opportunity that would yield a 9% rate of return. a. If performance is being measured by ROI, which division or divisions will probably accept the opportunity? b. If performance is being measured by residual income, which division or divisions will probably accept the opportunity? Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3A Req 3B Compute the margin, turnover, and return on investment…
Selected sales and operating data for three divisions of different structural engineering firms are given as follows: Division A $ 5,000,000 $ 1,000,000 24 Division C $ 8,100, 000 $ 1,620, 000 $4 Division B $ 9,000, 000 $ 4,500,000 $4 Sales Average operating assets Net operating income Minimum required rate of return 205,000 729, 000 109, 350 16.00% 16.20% 13.00% Required: 1. Compute the return on investment (ROI) for each division using the formula stated in terms of margin and turnover. 2. Compute the residual income (loss) for each division. 3. Assume that each division is presented with an investment opportunity that would yield a 16% rate of return. a. If performance is being measured by ROI, which division or divisions will probably accept or reject the opportunity? b. If performance is being measured by residual income, which division or divisions will probably accept or reject the opportunity? Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3A…
Selected sales and operating data for three divisions of different structural engineering firms are given below: Division C $ 25,450,000 $ 5,090,000 $636,250 12.50% Sales Average operating assets Net operating income Minimum required rate of return Division A $ 12,360,000 $ 3,090,000 $ 494,400 7.00% Required: 1. Compute each division's margin, turnover, and return on investment (ROI). 2. Compute each division's residual income (loss). 3. Assume each division is presented with an investment opportunity yielding a 8% rate of return. a. If performance is being measured by ROI, which division or divisions will accept the opportunity? b. If performance is being measured by residual income, which division or divisions will accept the opportunity? Division B $ 28,360,000 $ 7,090,000 $ 453,760 7.50% Complete this question by entering your answers in the tabs below. Division A Division B Division C Required 1 Required 2 Required 3A Required 3B Assume each division is presented with an…
Selected sales and operating data for three divisions of different structural engineering firms are given as follows: Division A Division B Division C Sales 12440000$ 35550000$ 25550000$ Average operating assets 3110000$ 7110000$ 5110000$ Net operating income 547360$ 639900$ 740950$ Minimum required rate of return 10.00% 10.50% 14.50$ Required: 1.Compute the return on investment (ROI) for each division using the formula stated in terms of margin and turnover. 2.Compute the residual income for each division. 3. Assume that each division is presented with an investment opportunity that would yield a 11% rate of return. a.If performance is being measured by ROI, which division or divisions will probably accept the opportunity? Reject? b.If performance is being measured by residual income, which division or divisions will probably accept the opportunity? Reject?