Managerial Accounting
Managerial Accounting
17th Edition
ISBN: 9781260709568
Author: Garrison, Ray
Publisher: MCGRAW-HILL HIGHER EDUCATION
Question
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Chapter 11, Problem 17P

1.

To determine

Operating assets refer to those assets which are acquired by the company to support its ongoing business operations. These are the assets that contribute to generating revenue. For instance, cash, accounts receivable, prepaid expenses, and so on.

:

The average operating assets of the company.

2.

To determine

Return on Investment or asset: It 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 the last year of the company.

3.

To determine

Residual income: 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 number of excess earnings earned over and above the minimum required return of the capital invested.

:

The residual income of last year.

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