Use the following information to answer the questions.Company X$ 12,480,000$ 3,120,000561,6008.00%Company Y$ 28,480,000$ 7,120,0002$Company Z$ 20,480,000$ 5,120,000532,480SalesAverage operating assetsNet operating incomeMinimum required rate of return$512,6408.50%10.40%Required:1. Compute the return on investment (ROI) for each company using the formula stated in terms of margin and turnover.2. Compute the residual income (loss) for each company.3. Each company is presented with an investment opportunity that would yield a 9% rate of return.a. Assume performance is measured based on ROI. Indicate whether each company will likely accept or reject the investmentopportunity.b. Assume performance is measured based on residual income. Indicate whether each company will likely accept or reject theinvestment opportunity.Complete this question by entering your answers in the tabs below.Req 1Req 2Req ЗAReq 3BEach company is presented with an investment opportunity that would yield a 9% rate of return. Assume performance ismeasured based on ROI. Indicate whether each company will likely accept or reject the investment opportunity.Company XCompany YCompany Z< Req 2Req 3B > Use the following information to answer the questions.Company X$ 12,480,000$ 3,120,000$Company Y$ 28,480,000$Company z$ 20,480,000$ 5,120,000532,48010.40%SalesAverage operating assetsNet operating incomeMinimum required rate of return7,120,000512,6408.50%561,6008.00%Required:1. Compute the return on investment (ROI) for each company using the formula stated in terms of margin and turnover.2. Compute the residual income (loss) for each company.3. Each company is presented with an investment opportunity that would yield a 9% rate of return.a. Assume performance is measured based on ROI. Indicate whether each company will likely accept or reject the investmentopportunity.b. Assume performance is measured based on residual income. Indicate whether each company will likely accept or reject theinvestment opportunity.Complete this question by entering your answers in the tabs below.Req 1Req 2Req 3AReq 3BEach company is presented with an investment opportunity that would yield a 9% rate of return. Assume performance ismeasured based on residual income. Indicate whether each company will likely accept or reject the investment opportunity.Company XCompany YCompany Z< Req 3AReq 3B >

Return on Investment = Net Operating IncomeAverage Operating Assets Residual Income = Net…

Use the following information to answer the questions. Company X $ 12,480,000 $ 3,120,000 2$ Company Y $ 28,480,000 $ 7,120,000 Company Z $ 20,480,000 $ 5,120,000 532,480 Sales Average operating assets Net operating income Minimum required rate of return 561,600 $ 512,640 24 8.00% 8.50% 10.40% Required: 1. Compute the return on investment (ROI) for each company using the formula stated in terms of margin and turnover. 2. Compute the residual income (loss) for each company. 3. Each company is presented with an investment opportunity that would yield a 9% rate of return. a. Assume performance is measured based on ROI. Indicate whether each company will likely accept or reject the investment opportunity. b. Assume performance is measured based on residual income. Indicate whether each company will likely accept or reject the investment opportunity.

Use the following information to answer the questions. Company X $ 12,480,000 $ 3,120,000 2$ Company Y $ 28,480,000 $ 7,120,000 Company Z $ 20,480,000 $ 5,120,000 532,480 Sales Average operating assets Net operating income Minimum required rate of return 561,600 $ 512,640 24 8.00% 8.50% 10.40% Required: 1. Compute the return on investment (ROI) for each company using the formula stated in terms of margin and turnover. 2. Compute the residual income (loss) for each company. 3. Each company is presented with an investment opportunity that would yield a 9% rate of return. a. Assume performance is measured based on ROI. Indicate whether each company will likely accept or reject the investment opportunity. b. Assume performance is measured based on residual income. Indicate whether each company will likely accept or reject the investment opportunity.

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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Subject: acounting
Supply the missing data for three service companies shown in the table below: Note: Loss amounts should be indicated by a minus sign. Round your percentage answers to nearest whole percent. Company B A C Sales Net operating income $ 9,120,000 $ 7,200,000 $ 4,680,000 $ 290,000 Average operating assets $ 3,040,000 $ 1,872,000 Return on investment (ROI) 11 % 20 % % Minimum required rate of return. Percentage Dollar amount Residual income 9% % 13 % $ 261,000 $ 93,600
Required Supply the missing information in the following table for Vernon Company. (Do not round intermediate calculations. Round "ROI" answer to 2 decimal places. (i.e., 0.2345 should be entered as 23.45).) Sales $369,600 ROI % Operating assets Operating income Turnover 2.1 Residual income Operating profit margin 14 % Desired rate of return 17 %
Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 Required 6 Required 7 Compute the company's margin, turnover, and return on investment (ROI) for the period. Note: Round your intermediate calculations and final answer to 2 decimal places. Margin % Turnover ROI %
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Assume the Residential Division of Kipper Faucets had the following results last year: What is the division’s RI? a. $(140,000) b. $104,000 c. $140,000 d. $(104,000)
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Data Sales $25,000,000 Net operating income $3,000,000 Average operating assets $9,000,000 Minimum required rate of return 25% Enter a formula into each of the cells marked with a ? below Review Problem: Return on Investment (ROI) and Residual Income Compute the ROI Margin ? Turnover ? ROI ? Compute the residual income Average operating assets ? Net operating income ? Minimum required return ? Residual income ?
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