Return on investment or asset establishes the relationship between the net income and the assets or capital employed. The ratio is used to measure the overall performance of an organization by looking at how efficiently an organization uses its resources. The margin, turnover, and return on investment (ROI) for Division A, Division B, and Division C.

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Answer 1

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Chapter 11, Problem 11.14E

1.

To determine

Introduction: Return on investment or asset establishes the relationship between the net income and the assets or capital employed. The ratio is used to measure the overall performance of an organization by looking at how efficiently an organization uses its resources.

The margin, turnover, and return on investment (ROI) for Division A, Division B, and Division C.

2.

To determine

Introduction: A business performance measurement that takes into account the minimum required return on the asset employed is a residual income, which the company expects from the asset in which the investment has been made. In the other words, residual income is the amount of excess earnings earned over and above the minimum required return of the capital invested.

The residual income of Division A, Division B, and Division C.

3 a.

To determine

Introduction: Return on investment or asset establishes the relationship between the net income and the assets or capital employed. The ratio is used to measure the overall performance of an organization by looking at how efficiently an organization uses its resources.

The division or divisions will probably accept or reject the opportunity if performance is being measured by ROI.

3 b.

To determine

Introduction: A business performance measurement that takes into account the minimum required return on the asset employed is a residual income, which the company expects from the asset in which the investment has been made. In the other words, residual income is the amount of excess earnings earned over and above the minimum required return of the capital invested.

The division or divisions will probably accept or reject the opportunity if performance is being measured by Residual Income.

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Investment Center Sales. Net income Average invested assets Profit margin Investment turnover Return on investment Profit Margin: Investment Center A B Investment Turnover: Investment Center A B Choose Numerator: Investment Center Use the information in the table above to compute each department's contribution to overhead (both in dollars and as a percent). (Round your final answers to 2 decimal places.) Return on investment: A B Choose Numerator: Choose Numerator: 1 A 1 $ $ 584,600 $1,580,000 ? 1 10% ? ?% B $12,200,000 $ $ 1 Choose Denominator: Choose Denominator: 1 Choose Denominator: ? ? ?% 1.3 13% = Profit Margin Profit margin 10.00 % % = Investment Turnover = Investment turnover 1.30 Return on investment = Return on investment % 13.00 %

Tan Corporation of Japan has two regional divisions with headquarters in Osaka and Yokohama. Selected data on the two divisions follow: Division Osaka Yokohama $ 10,600,000 $ 36,000,e00 24 742,000 $ 3,240,000 2$ 2,650,000 Sales Net operating income Average operating assets $ 18,000,000 Required: 1. For each division, compute the return on investment (ROI) in terms of margin and turnover. 2. Assume that the company evaluates performance using residual income and that the minimum required rate of return for any division is 16%. Compute the residual income for each division. Complete this question by entering your answers in the tabs below. Required 1 Required 2 For each division, compute the return on investment (ROI) in terms of margin and turnover. 7:32 PM 4/15/2021 o search

Answer 2

Question

Chapter 11, Problem 11.14E

1.

To determine

Introduction: Return on investment or asset establishes the relationship between the net income and the assets or capital employed. The ratio is used to measure the overall performance of an organization by looking at how efficiently an organization uses its resources.

The margin, turnover, and return on investment (ROI) for Division A, Division B, and Division C.

2.

To determine

Introduction: A business performance measurement that takes into account the minimum required return on the asset employed is a residual income, which the company expects from the asset in which the investment has been made. In the other words, residual income is the amount of excess earnings earned over and above the minimum required return of the capital invested.

The residual income of Division A, Division B, and Division C.

3 a.

To determine

Introduction: Return on investment or asset establishes the relationship between the net income and the assets or capital employed. The ratio is used to measure the overall performance of an organization by looking at how efficiently an organization uses its resources.

The division or divisions will probably accept or reject the opportunity if performance is being measured by ROI.

3 b.

To determine

Introduction: A business performance measurement that takes into account the minimum required return on the asset employed is a residual income, which the company expects from the asset in which the investment has been made. In the other words, residual income is the amount of excess earnings earned over and above the minimum required return of the capital invested.

The division or divisions will probably accept or reject the opportunity if performance is being measured by Residual Income.

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Answer 3

Question

Chapter 11, Problem 11.14E

1.

To determine

Introduction: Return on investment or asset establishes the relationship between the net income and the assets or capital employed. The ratio is used to measure the overall performance of an organization by looking at how efficiently an organization uses its resources.

The margin, turnover, and return on investment (ROI) for Division A, Division B, and Division C.

2.

To determine

Introduction: A business performance measurement that takes into account the minimum required return on the asset employed is a residual income, which the company expects from the asset in which the investment has been made. In the other words, residual income is the amount of excess earnings earned over and above the minimum required return of the capital invested.

The residual income of Division A, Division B, and Division C.

3 a.

To determine

Introduction: Return on investment or asset establishes the relationship between the net income and the assets or capital employed. The ratio is used to measure the overall performance of an organization by looking at how efficiently an organization uses its resources.

The division or divisions will probably accept or reject the opportunity if performance is being measured by ROI.

3 b.

To determine

Introduction: A business performance measurement that takes into account the minimum required return on the asset employed is a residual income, which the company expects from the asset in which the investment has been made. In the other words, residual income is the amount of excess earnings earned over and above the minimum required return of the capital invested.

The division or divisions will probably accept or reject the opportunity if performance is being measured by Residual Income.

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Answer 4

Question

Chapter 11, Problem 11.14E

1.

To determine

Introduction: Return on investment or asset establishes the relationship between the net income and the assets or capital employed. The ratio is used to measure the overall performance of an organization by looking at how efficiently an organization uses its resources.

The margin, turnover, and return on investment (ROI) for Division A, Division B, and Division C.

2.

To determine

Introduction: A business performance measurement that takes into account the minimum required return on the asset employed is a residual income, which the company expects from the asset in which the investment has been made. In the other words, residual income is the amount of excess earnings earned over and above the minimum required return of the capital invested.

The residual income of Division A, Division B, and Division C.

3 a.

To determine

Introduction: Return on investment or asset establishes the relationship between the net income and the assets or capital employed. The ratio is used to measure the overall performance of an organization by looking at how efficiently an organization uses its resources.

The division or divisions will probably accept or reject the opportunity if performance is being measured by ROI.

3 b.

To determine

Introduction: A business performance measurement that takes into account the minimum required return on the asset employed is a residual income, which the company expects from the asset in which the investment has been made. In the other words, residual income is the amount of excess earnings earned over and above the minimum required return of the capital invested.

The division or divisions will probably accept or reject the opportunity if performance is being measured by Residual Income.

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Answer 5

Chapter 11, Problem 11.14E

1.

To determine

Introduction: Return on investment or asset establishes the relationship between the net income and the assets or capital employed. The ratio is used to measure the overall performance of an organization by looking at how efficiently an organization uses its resources.

The margin, turnover, and return on investment (ROI) for Division A, Division B, and Division C.

2.

To determine

Introduction: A business performance measurement that takes into account the minimum required return on the asset employed is a residual income, which the company expects from the asset in which the investment has been made. In the other words, residual income is the amount of excess earnings earned over and above the minimum required return of the capital invested.

The residual income of Division A, Division B, and Division C.

3 a.

To determine

Introduction: Return on investment or asset establishes the relationship between the net income and the assets or capital employed. The ratio is used to measure the overall performance of an organization by looking at how efficiently an organization uses its resources.

The division or divisions will probably accept or reject the opportunity if performance is being measured by ROI.

3 b.

To determine

Introduction: A business performance measurement that takes into account the minimum required return on the asset employed is a residual income, which the company expects from the asset in which the investment has been made. In the other words, residual income is the amount of excess earnings earned over and above the minimum required return of the capital invested.

The division or divisions will probably accept or reject the opportunity if performance is being measured by Residual Income.

Answer 6

Chapter 11, Problem 11.14E

1.

To determine

Introduction: Return on investment or asset establishes the relationship between the net income and the assets or capital employed. The ratio is used to measure the overall performance of an organization by looking at how efficiently an organization uses its resources.

The margin, turnover, and return on investment (ROI) for Division A, Division B, and Division C.

Answer 7

Chapter 11, Problem 11.14E

1.

To determine

Introduction: Return on investment or asset establishes the relationship between the net income and the assets or capital employed. The ratio is used to measure the overall performance of an organization by looking at how efficiently an organization uses its resources.

The margin, turnover, and return on investment (ROI) for Division A, Division B, and Division C.

Answer 8

2.

To determine

Introduction: A business performance measurement that takes into account the minimum required return on the asset employed is a residual income, which the company expects from the asset in which the investment has been made. In the other words, residual income is the amount of excess earnings earned over and above the minimum required return of the capital invested.

The residual income of Division A, Division B, and Division C.

Answer 9

2.

To determine

Introduction: A business performance measurement that takes into account the minimum required return on the asset employed is a residual income, which the company expects from the asset in which the investment has been made. In the other words, residual income is the amount of excess earnings earned over and above the minimum required return of the capital invested.

The residual income of Division A, Division B, and Division C.

Answer 10

3 a.

To determine

Introduction: Return on investment or asset establishes the relationship between the net income and the assets or capital employed. The ratio is used to measure the overall performance of an organization by looking at how efficiently an organization uses its resources.

The division or divisions will probably accept or reject the opportunity if performance is being measured by ROI.

Answer 11

3 a.

To determine

Introduction: Return on investment or asset establishes the relationship between the net income and the assets or capital employed. The ratio is used to measure the overall performance of an organization by looking at how efficiently an organization uses its resources.

The division or divisions will probably accept or reject the opportunity if performance is being measured by ROI.

Answer 12

3 b.

To determine

Introduction: A business performance measurement that takes into account the minimum required return on the asset employed is a residual income, which the company expects from the asset in which the investment has been made. In the other words, residual income is the amount of excess earnings earned over and above the minimum required return of the capital invested.

The division or divisions will probably accept or reject the opportunity if performance is being measured by Residual Income.

Answer 13

3 b.

To determine

Introduction: A business performance measurement that takes into account the minimum required return on the asset employed is a residual income, which the company expects from the asset in which the investment has been made. In the other words, residual income is the amount of excess earnings earned over and above the minimum required return of the capital invested.

The division or divisions will probably accept or reject the opportunity if performance is being measured by Residual Income.

Answer 14

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Answer 15

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Answer 17

Ch. 11 - Prob. 11.1Q Ch. 11 - Prob. 11.2Q Ch. 11 - Prob. 11.3Q Ch. 11 - Prob. 11.4Q Ch. 11 - Prob. 11.5Q Ch. 11 - Prob. 11.6Q Ch. 11 - Prob. 11.7Q Ch. 11 - Prob. 11.8Q Ch. 11 - Prob. 11.9Q Ch. 11 - Why is using sales dollars as an allocation base...

Solution Summary: The author explains the ratio used to determine the margin, turnover, and return on investment (ROI) for Divisions A, B and C.

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