Tan Corporation of Japan has two regional divisions with headquarters in Osaka and Yokohama. Selected data on the two divisions follow: Sales Set operating income Average operating assets Required: 1. For each division, compute the return on investment (ROI). 2. Compute the residual income for each division assuming the company's minimum required rate of return is 16%. Complete this question by entering your answers in the tabs below. ROI Division Osaka Yokohana $9,600,000 $ 26,000,000 $672,000 $2,340,000 $3,200,000 $ 13,000,000 Required 1 Required 2 For each division, compute the return on investment (ROI). Osaka Yokohama Required Required 2 >

Tan Corporation of Japan has two regional divisions with headquarters in Osaka and Yokohama. Selected data on the two divisions follow: Sales Set operating income Average operating assets Required: 1. For each division, compute the return on investment (ROI). 2. Compute the residual income for each division assuming the company's minimum required rate of return is 16%. Complete this question by entering your answers in the tabs below. ROI Division Osaka Yokohana $9,600,000 $ 26,000,000 $672,000 $2,340,000 $3,200,000 $ 13,000,000 Required 1 Required 2 For each division, compute the return on investment (ROI). Osaka Yokohama Required Required 2 >

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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Comparison of Performance Using Return on Investment (ROI) Comparative data on three companies in the same service industry are given below: Required: 1. What advantages are there to breaking down the ROI computation into two separate elements, margin and turnover? 2. Fill in the missing information above, and comment on the relative performance of the three companies in as much detail as the data permit. Make
The following information is available about the status and operations of the Manufacturing Division of Taylor Company, which has a hurdle rate of 6%. Divisional identifiable average assets $ 411,637 Divisional income from operations $ 18,924 Divisional sales revenue $ 368,363 1. Compute the ROI for the Manufacturing Division. 2. Break the Manufacturing Division ROI down using the Profit Margin and Investment turnover (DuPont) formula. 3. Compute the residual income for the Manufacturing Division.
Using the following data for Ace Guitar Company: A Region Sales Cost of goods sold Selling expenses Support department expenses: Purchasing Payroll accounting $781,000 296,800 187,400 A Region Operating Income B Region Operating Income B Region $639,000 242,800 153,400 $238,600 159,000 Allocate support department expenses proportional to the sales of each region. Determine the divisional operating income for the A and B regions.
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A. Compute the divisional ROI for the Campus Division. B. Compute the divisional RI for the Campus Division.
ROI is effective because it takes into consideration the three factors under the control of an investment center manager: revenues, costs, and investments. ROI measures the income (or return) earned on each dollar of investment. APPLY THE CONCEPTS: Calculating return on investment The divisional income statements for three divisions of the McLaren Company are shown. McLaren Company Divisional Income Statements For the Year Ending December 31, 2012 Division A Division B Division C Sales Revenue $1,947,000 $1,197,000 $594,000 Operating expenses (1,148,730) (897,750) (314,820) Operating income before service department charges $798,270 $299,250 $279,180 Service department charges (467,280) (177,156) (166,320) Operating income $330,990 $122,094 $112,860 Additional financial data from the three divisions of the McLaren Company are shown. Division A Division B Division C Invested assets $1,100,000 $665,000 $450,000 Calculate the return on investment for each division. If required, round the…
Meiji Isetan Corporation of Japan has two regional divisions with headquarters in Osaka and Yokohama. Selected data on the two divisions follow: Division Osaka Yokohama Sales $ 9,600,000 $ 26,000,000 Net operating income $ 672,000 $ 2,340,000 Average operating assets $ 3,200,000 $ 13,000,000 Required: 1. For each division, compute the return on investment (ROI) in terms of margin and turnover. 2. Assume that the company evaluates performance using residual income and that the minimum required rate of return for any division is 16%. Compute the residual income for each division. 3. Is Yokohama’s greater amount of residual income an indication that it is better managed?
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Please answer questions No. 1 to 6 of Jay Arr Company. Please provide a complete solution. Thank You
Meiji Isetan Corporation of Japan has two regional divisions with headquarters in Osaka and Yokohama. Selected data on the two divisions follow: Division Osaka Yokohama Sales $ 9,800,000 $ 28,000,000 Net operating income $ 588,000 $ 2,240,000 Average operating assets $ 2,450,000 $ 14,000,000 Required: 1. For each division, compute the return on investment (ROI) in terms of margin and turnover. 2. Assume that the company evaluates performance using residual income and that the minimum required rate of return for any division is 14%. Compute the residual income for each division. 3. Is Yokohama’s greater amount of residual income an indication that it is better managed? Osaka Yokohama ROI % % Osaka Yokohama Residual income