Using the base case, calculate the composite effects of a 5 percent increase in Sales, a 2 percent decrease in Gross Margin, and a 5percent increase is SG&A as percent of Sales.Colossal Chemical CorporationYear Ended December 31, 2021($000,000 omitted)Base CaseSales$2,110 $Cost of goods sold1,287Selling, general, and401administrative expenseDepreciation121Research and development112Total costs and expenses$1,921 $Operating Income189Interest expense34Earnings before Income Taxes$155 $Provision for Income Taxes28Net Income$127 $Combined

Given the information:Sales = 5% increase or (5/100 = 0.05)Gross margin = 2% decreaseSG&A = 5%…

Answered: Using the base case, calculate the…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Coyle Manufacturing reports the following information for year 1: Sales revenue (60,000 units) $ 5,130,000 Manufacturing costs Materials $ 302,000 256,000 Variable cash costs Fixed cash costs. Depreciation (fixed) 590,000 1,800,000 Marketing and administrative costs Marketing (variable, cash) Marketing depreciation Administrative (fixed, cash) Administrative depreciation Total costs Operating profits (losses) 760,000 269,000 916,000 134,000 $ 5,027,000 $ 103,000 All depreciation charges are fixed. Manufacturing depreciation is expected to increase by 10 percent in year 2. Marketing and administrative depreciation are expected to remain the same for year 2. Sales volume is expected to increase by 5 percent, but prices are expected to fall by 10 percent. Materials costs per unit are expected to decrease by 8 percent. Unit variable cash manufacturing costs are expected to increase by 15 percent. Fixed cash costs are expected to increase by 6 percent. Variable marketing costs will change…
Required information [The following information applies to the questions displayed below.] Westerville Company reported the following results from last year's operations: Sales $ 1,000,000 300,000 Variable expenses Contribution margin Fixed expenses 700,000 500,000 Net operating income $ 200,000 $625,000 Average operating assets At the beginning of this year, the company has a $120,000 investment opportunity with the following cost and revenue characteristics: Sales Contribution margin ratio Fixed expenses $ 200,000 $ 90,000 The company's minimum required rate of return is 15%. Residual income 60% of sales 13. If the company pursues the investment opportunity and otherwise performs the same as last year, what residual income will it earn this year?
Required information [The following information applies to the questions displayed below.] Westerville Company reported the following results from last year's operations: Sales Variable expenses Contribution margin Fixed expenses $ 1,600,000 700,000 900,000 660,000 Net operating income 24 240,000 Average operating assets $1,000,000 At the beginning of this year, the company has a $325,000 investment opportunity with the fol characteristics: $ 520,000 Sales Contribution margin ratio Fixed expenses 70 % of sales $ 312,000 The company's minimum required rate of return is 15%. 4. What is the margin related to this year's investment opportunity? Margin % ( Prev Ps Ai Pr re to search
Calculate the return on investment (as a %) for the given company. (Round your answer to the nearest tenth of a percent.) Company Net Sales Cost ofGoods Sold GrossProfit OperatingExpenses a countertop installer $762,500 $487,560 $274,940 $176,410 Net Profit Gross ProfitMargin (%) Net ProfitMargin (%) Owner's Equity Return onInvestment (%) $98,530 36.1% 12.9% $429,210 %
Margin, Turnover, Return on Investment, Average Operating Assets Elway Company provided the following income statement for the last year: Sales $879,510,000 Less: Variable expenses 558,460,000 Contribution margin $321,050,000 Less: Fixed expenses 198,790,000 Operating income $122,260,000 At the beginning of last year, Elway had $38,636,000 in operating assets. At the end of the year, Elway had $41,336,000 in operating assets. Required: 1. Compute average operating assets.$ 2. Compute the margin (as a percent) and turnover ratios for last year. If required, round your answers to two decimal places. Margin % Turnover 3. Compute ROI as a percent. Use the part 2 final answers in these calculations and round the final answer to two decimal places. % 4. ROI measures a company’s ability to generate relative to its investment in assets. The greater the ROI, the efficiently the company is generating from its assets. 5. CONCEPTUAL CONNECTION Comment on why the ROI…
Subject:- Accounting
Calculate the return on investment (as a %) for the given company. (Round your answer to the nearest tenth of a percent.) Company Net Sales Cost ofGoods Sold GrossProfit OperatingExpenses a countertop installer $759,500 $486,560 $272,940 $176,410 Net Profit Gross ProfitMargin (%) Net ProfitMargin (%) Owner's Equity Return onInvestment (%) $96,530 35.9% 12.7% $425,210 %
Pine Corp. has revenues of $520,000 resulting in an operating income of $66,560. Invested assets total $611,000. Residual income is $24,000. Calculate the new residual income if sales increase by 10% and the profit margin and invested assets remain the same. (Do not round your intermediate calculations.) A $0 B $30,656 C $42,560 D $10,496
Fields Company presented the following data for the current year: Net sales revenue $275,000 Cost of goods sold 125,000 Operating expenses 40,000 Income tax rate 25% Determine the company's profit margin (rounded) A Select one: O O a. 33% b. 31% C. 28% d. 30%
Required information [The following information applies to the questions displayed below] Westerville Company reported the following results from last year's operations: Sales Variable expenses Contribution margin Fixed expenses Net operating income Average operating assets ROI At the beginning of this year, the company has a $300,000 investment opportunity with the following cost and revenue characteristics: Sales $ 1,800,000 435,000 1,365,000 1,005,000 $360,000 $ 1,200,000 $360,000 $ 216,000 The company's minimum required rate of return is 10% Contribution margin ratio Fixed expenses 70 of sales. 6. What is the ROI related to this year's investment opportunity?
Margin, Turnover, Return on Investment, Average Operating Assets Elway Company provided the following income statement for the last year: Sales $865,050,000 Less: Variable expenses 550,973,000 Contribution margin $314,077,000 Less: Fixed expenses 192,762,000 Operating income $121,315,000 At the beginning of last year, Elway had $38,661,000 in operating assets. At the end of the year, Elway had $41,350,000 in operating assets. Required: 1. Compute average operating assets.$fill in the blank 1 2. Compute the margin (as a percent) and turnover ratios for last year. If required, round your answers to two decimal places. Margin fill in the blank 2 % Turnover fill in the blank 3 3. Compute ROI as a percent. Use the part 2 final answers in these calculations and round the final answer to two decimal places.fill in the blank 4 % 4. ROI measures a company’s ability to generate relative to its investment in assets. The greater the ROI, the efficiently the company…
Determining missing items in return and residual income computations Data for Uberto Company are presented in the following table of rates of return on investment and residual incomes: Invested Assets Income from Operations Return on Investment Minimum Return Minimum Acceptable Income from Operations Residual Income $925,000 $185,000 (a) 15% (b) (c) $775,000 (d) (e) (f) $93,000 $23,250 $450,000 (g) 18% (h) $58,500 (i) $610,000 $97,600 (j) 12% (k) (l) Determine the missing values, identifying each item by the appropriate letter. a. fill in the blank 1% b. $fill in the blank 2 c. $fill in the blank 3 d. $fill in the blank 4 e. fill in the blank 5% f. fill in the blank 6% g. $fill in the blank 7 h. fill in the blank 8% i. $fill in the blank 9 j. fill in the blank 10% k. $fill in the blank 11 l. $fill in the blank 12

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