Use the following information for the Problems below: The following data pertain to three divisions of Nevada Aggregates, Incorporated. The company's required rate of on invested capital is 8 percent. Sales revenue Income Average investment Sales margin Capital turnover ROI Residual income Division A ? $ 440,000 ? 40% 2 ? ? Division B $ 10,000,000 $ 2,160,000 $ 2,600,000 ? ? ? ? Division C ? ? ? 45% ? 40% $ 139,000

Use the following information for the Problems below: The following data pertain to three divisions of Nevada Aggregates, Incorporated. The company's required rate of on invested capital is 8 percent. Sales revenue Income Average investment Sales margin Capital turnover ROI Residual income Division A ? $ 440,000 ? 40% 2 ? ? Division B $ 10,000,000 $ 2,160,000 $ 2,600,000 ? ? ? ? Division C ? ? ? 45% ? 40% $ 139,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

The following are selected data for the division for the consumer products of ABC Corp for 2019: Sales 50,000,000 Average invested capital (assets) 20,000,000 Net income 2,000,000 Cost of capital 8% What is the return on sales for the division? 1.4% 2. 8% 3.10% 4. 20% О1 O 2 O 4 3.
The following are selected data for the division for the consumer products of ABC Corp for 2020: Sales P 10,000,000 Average invested capital 4,000,000 Net Income 400,000 Cost of Capital 8% What is the return on sales for the division? 4% 8% 10% 20% Group of answer choices 1 2 3 4
The income from operations and the amount of invested assets in each division of Shiner Industries are as follows: Income from Invested Assets Retail Division Commercial Division Internet Division Operations $132,000 $600,000 115,000 460,000 90,000 500,000 a. Compute the return on investment for each division. Round to the nearest whole number. Division Retail Division Percent % 90 Commercial Division Internet Division % % b. Which division is the most profitable per dollar invested?
Assume the Residential Division of Kappy Faucets had the following results last year. Net sales revenue $ 6,600,000 Operating income 990,000 Average total assets 5,500,000 Management's target rate of return 16% What is the division's profit margin ratio? O A 120% OB. 15% OC. 667% OD. 18%
Gator, Inc. has three operating divisions and requires a 12% return on all investments. Selected information presented here: |Division A |Division B Division C $1,000,000 $120,000 $500,000 Revenues ? ? Operating Income Operating Assets Margin $100,000 ? $300,000 ? 12% ? Turnover 2 turns 1 turn ? ROI Residual Income ? ? $25,000 ? ? a. Calculate the missing amounts for each division. b. Comment on the relative performance of each division. c. Provide an example to show how residual income improves decision making at the divisional level.
Selected sales and operating data for three divisions of different structural engineering firms are given as follows: Division B $ 14,175,000 $ 7,087,500 $ 567,000 10% Division C $ 25,312,500 $ 5,062,500 $ 810,000 16% Sales Average operating assets Net operating income Minimum required rate of return 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 15% 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 Division A $ 12,150,000 $ 3,037,500 $ 607,500 14% Req 2 Division A Division…
solution
The sales, income from operations, and invested assets for each division of Wren Company are as follows: 　　 Sales Income from Operations Invested Assets Division C $5,000,000 $630,000 $4,000,000 Division D 6,800,000 760,000 3,900,000 Division E 3,750,000 750,000 7,500,000 Management has established a minimum rate of return for invested assets of 10%. What is the Residual Income for Division C? What is the Residual Income for Division D? What is the Residual Income for Division E? Based on Residual Income, Division __?__ is the most profitable.
1. Roy Toy, a division of Fun Corp. has a net operating income of $60000 and average operating assets of $300000. The required rate of return for the company is 15%. What is the division's residual income? a. $240000 b. $45000 c. $15000 d. $51000 2. If the manager of Roy To division is evaluated based on residual income, will she want to make an investment of $100000 that would generate an additional net operating income of $18000 per year?a. Yesb. No
Selected financial data for Woody Company's Furniture Division is as follows: Sales Operating income Total assets Current liabilities Target rate of return Weighted average cost of capital $2,100,000 $420,000 $1,050,000 $200,000 12% 10% What is Woody Company's Furniture Division return on investment? A) 9.52% B) 40.00% C) 20.00% D) 2000.00%
Please help me with show all calculation thanku
Adams Cough Drops operates two divisions. The following information pertains to each division for Year 1. Division A Division B $200,000 $85,000 $ 16,100 $ 9,300 $ 59,000 $37,000 17% Sales Operating income Average operating assets Company's desired rate of return 17% Required a. Compute each division's residual income. b. Which division increased the company's profitability more? a. Division A Division B b. The division that increased the company's profitability more is Residual Income