The Commercial Division of Galena Company has operating income of $106,240 and assets of $332,000. The minimum acceptable return on assets is 10%. What is the residual income for the division?
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Q: residual income for the division
A: Residual income = Income from operations - (Assets * Minimum acceptable return on assets)
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A: The residual income = income from operations-(divisional assets* the minimum rate of return)
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- DhapaCabell Products is a division of a major corporation. Last year the division had total sales of $11,440,000, net operating income of $686.400, and average operating assets of $2,402.400. The company's minimum required rate of return is 13%. The division's residual income is closest to: Multiple Cholce $686.400 $374.088 $(624.624) S998.712 65°F Cloudy to search DELL ITDukelow Corporation has two divisions: the Governmental Products Division and the Export Products Division. The Governmental Products Division's divisional segment margin is $39,800 and the Export Products Division's divisional segment margin is $92,200. The total amount of common fixed expenses not traceable to the individual divisions is $104,400. What is the company's net operating income (loss)? $236,400 $132,000 $27,600 ($132,000)
- Jamison Company has an investment in assets of $960,000 income that is 10% of sales, and an ROI of 16%. From this information the amount of income would be Multiple Choice $153,600. $253,600 $168,600 impossible to determine from the information given.The following information is provided for each division. Net Income $6,100,000 2,758,000 1,000,000 Investment Center Cameras and camcorders Phones and communications Computers and accessories Assume a target income of 14% of average invested assets. Required: Compute residual income for each division. (Enter losses with a minus sign.) Target Income Targeted return Target income Residual Income Residual income (loss) Cameras and Camcorders Cameras and Camcorders Average Assets $ 25,700,000 19,700,000 10,400,000 % Phones and Communications Phones and Communications % Computers and Accessories Computers and Accessories %Polymer Coating Enterprises has an operating income of $100,000 on revenues of $1,000,000. Average invested assets are $500,000 and the Company has an 8% cost of capital. What is the residual income?
- Washington Company has two divisions: the Adams Division and the Jefferson Division. The following information pertains to last year's results: Adams Division Jefferson Division Net (after-tax) income $641,300 $378,000 Total capital employed 4,200,000 3,282,500 Washington's actual cost of capital was 12%. Required: 1. Calculate the EVA for the Adams Division. If required, enter a negative EVA as a negative number by entering your answer with the minus sign. 2. Calculate the EVA for the Jefferson Division. If required, enter a negative EVA as a negative number by entering your answer with the minus sign. 3. Conceptual Connection: Is each division creating or destroying wealth? Adams Division Jefferson Division 4. Describe generally the types of actions that Washington’s management team could take to increase Jefferson Division’s EVA? Increase the after-tax operating profit that is generated from using the same amount of invested capital. Continue…GenoPearls Company, a division of PUSHING THE LIMITS Corporation, has sales of P12,000,000 and variable costs and expenses amounting to P8,000,000. The average assets utilized in the operations also amount to P8,000,000 with a 12% cost of capital. Direct fixed costs and expenses amounts to P1,000,000. In measuring the performance of GenoPearls Company, return on investment and residual income are then by what amounts? (Sample format of the answer: 12.34%; P1,234,567)Buckley Company operates three segments. Income statements for the segments imply that profitability could be improved if Segment A were eliminated. BUCKLEY COMPANY Income Statements for Year 2 Segment A B C Sales $ 330,000 $ 480,000 $ 500,000 Cost of goods sold (242,000 ) (184,000 ) (190,000 ) Sales commissions (30,000 ) (44,000 ) (44,000 ) Contribution margin 58,000 252,000 266,000 General fixed operating expenses (allocation of president’s salary) (92,000 ) (92,000 ) (92,000 ) Advertising expense (specific to individual divisions) (6,000 ) (20,000 ) 0 Net income (loss) $ (40,000 ) $ 140,000 $ 174,000 Required Prepare a schedule of relevant sales and costs for Segment A. Prepare comparative income statements for the company as a whole under two alternatives: (1) the retention of Segment A and (2) the elimination of Segment A. Options for required A table are: Advertising…
- Cabell Products is a division of a major corporation. Last year the division had total sales of $11,650,000, net operating income of $1,141,700, and average operating assets of $3,495,000. The company's minimum required rate of return is 11%. The division's residual income is closest to: Multiple Choice $1,141,700 $1,526,150 $757,250 $(768,900)Concord Company earned a controllable margin of $125000 on sales of $1607000. The division had average operating assets of $1293000. The company requires a return on investment of at least 7%. How much is residual income? O $34490 O $159490 O $90510 O $112490The shareholders' equity section of Monty Corporation as at December 31, 2020, follows: 10% cumulative preferred shares, 100,000 shares authorized, 68,000 shares outstanding $4,600,000 Common shares, 10 million shares authorized and issued 10,000,000 Contributed surplus 10,100,000 24,700,000 Retained earnings 176,000,000 $200,700,000 Net income of $20 million for 2020 reflects a total effective tax rate of 21%. Included in the net income figure is a loss of $16 million (before tax) relating to the operations of a business segment that is to be discontinued. Calculate earnings per share information as it should appear in the financial statements of Monty Corporation for the year ended December 31, 2020. (Round answers to 2 decimal places, eg. 52.75.) Earnings per share Continuing Operations $ Discontinued Operations Net Income / (Loss) $