Solution with steps of the financial accounting Problem The income from operations and the amount of invested assets ineach division of Lucifer Industries are as follows:Income from Operations Invested AssetsSporting Goods Division $107,000Health Care DivisionCommercial Division$126,900$59,500$565,000$692,000$365,000• Required: Compute the rate of return on investment for eachdivision. (Round to the nearest whole number.)

Concept of Income from OperationsIncome from operations represents the profit earned by a division…

Answered: The income from operations and the…

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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Question: The income from operations and the amount of invested assets in each division of Devon Industries are as follows: Income from Operations Invested Assets Sporting Goods Division $102,000 Health Care Division $113,900 Commercial Division $55,500 Required: $510,000 $670,000 $370,000 a. Compute the rate of return on investment for each division. (Round to the nearest whole number.) Division Percent Sporting Goods Division % Health Care Division Commercial Division % % b. Which division is the most profitable per dollar invested?
The sales, income from operations, and invested assets for each division of Grosbeak Company are as follows: Division E Division F Division G Profit Margin Investment Turnover Sales $5,000,000 4,800,000 7,000,000 Return on investment Income from Operations $550,000 860,000 860,000 a. Using the DuPont formula, determine the profit margin, investment turnover, and return on investment for each division investment to one decimal place. Division E % % Invested Assets b. Which division is the most profitable per dollar invested? $2,400,000 2,500,000 2,900,000 Division F % % Division G E % %
The sales, income from operations, and invested assets for each division of Grosbeak Company are as follows: Sales Income fromOperations InvestedAssets Division E $5,000,000 $550,000 $2,400,000 Division F 4,800,000 860,000 2,500,000 Division G 7,000,000 860,000 2,900,000 a. Using the DuPont formula, determine the profit margin, investment turnover, and rate of return on investment for each division. Round profit margin to two decimal places, investment turnover to four decimal places and rate of return on investment to one decimal place. Division E Division F Division G Profit Margin % % % Investment Turnover Rate of return on investment % % % b. Which division is the most profitable per dollar invested?
Augustus Electrical Company has 2 divisions, one in Georgetown and one in Berbice Guyana and information on the both divisions are as follows: Georgetown Berbice Total assets $100,000 $500,000 Current liabilities 25,000 150,000 Revenue 50,000 50,000 Income before tax 20,000 75,000 Required: Calculate the return on investment (ROI) using net income and total assets as the measure of income and investment for the Berbice division. a.150% b.1.5% c.15% d.20%
(J) Selected sales and operating data for three divisions of different structural engineering firms are given as follows: Division ADivision BDivision CSales$ 12,120,000$ 28,120,000$ 20,120,000Average operating assets$ 3,030,000$ 7,030,000$ 5,030,000Net operating income$ 496,920$ 449,920$ 503,000Minimum required rate of return7.00%7.50%10.00%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 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 being measured by residual income, which division or divisions will probably accept the opportunity
The sales, income from operations, and invested assets for each division of Jackson Corporation are as follows: Sales Income from Operations Invested Assets Division E $4,100,000 $550,000 $2,400,000 Division F 4,700,000 760,000 2,500,000 Division G 7,200,000 860,000 2,800,000 (a) Using the Dupont ROI expanded expression, determine the profit margin, investment turnover, and rate of return on investment for each division. You must provide 3 answers for each division! Round all answers to two decimal places. (b) Which Division is the most profitable per dollar invested? (a) (b)
The income from operations and the amount of invested assets in each division of Shiner Industries are as follows: Income fromOperations InvestedAssets Retail Division $9,350,000 $55,000,000 Commercial Division 10,640,000 38,000,000 Internet Division 2,240,000 16,000,000 a. Compute the return on investment for each division. Division Percent Retail Division fill in the blank 1% Commercial Division fill in the blank 2% Internet Division fill in the blank 3% b. Which division is the most profitable per dollar invested?
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The operating income and the amount of invested assets in each division of Conley Industries are as follows: Retail Division Commercial Division Internet Division Operating Income $97,200 91,200 79,300 Invested Assets $540,000 570,000 610,000 a. Compute the return on investment for each division. (Round to the nearest whole percentage.) Division Retail Division Commercial Division Internet Division Percent % % % b. Which division is the most profitable per dollar invested? Retail Division
Required information Use the following information for the Problems below: The following data pertain to three divisions of Nevada Aggregates, Incorporated. The company's required rate o on invested capital is 8 percent. Sales revenue Income Average investment Sales margin Capital turnover ROI Residual income Sales revenue Income Average investment Sales margin Capital turnover ROI Residual income Division A ? $ 440,000 ? 40% 2 ? ? Division A $ 8,150,000 $ 1,630,000 $ 8,150,000 20 % 1.00 $ 978,000 20% Required: The following data pertain to three divisions of Nevada Aggregates, Incorporated. The company's required rate of return capital is 8 percent. Note: Round "Capital turnover" answers to 2 decimal places. $ $ $ Division B $ 10,000,000 $ 2,160,000 $ 2,600,000 $ Division B 40,300,000 8,866,000 10,075,000 22 % 4.00 88 % ? ? ? 8,060,000 Division C ? $ ? ? 45% ? 40% $ 139,000 Division C 25 % 20 % 471,000
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…

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