Return on investment (ROI): Return on investment is a profitability ratio that represents the percentage return on the investment made. It is calculated by dividing the Net Income by the Average total assets. The formulas to calculate the ROI are as follows: R O I = N e t I n c o m e A v e r a g e t o t a l a s s e t s R O I ( E x p a n d e d ) = N e t I n c o m e S a l e s × S a l e s A v e r a g e t o t a l a s s e t s Or R O I = P r o f i t M a r g i n R a t i o × A s s e t T u r n o v e r r a t i o Residual Income (RI): Residual Income is the income earned over and above the expected rate of return on assets invested in the business. It is calculated by dividing the Sales by Average total assets. The formulas to calculate the Residual Income is as follows: R e s i d u a l I n c o m e = N e t I n c o m e – ( A v e r a g e a s s e t s × R e q u i r e d r a t e o r R e t u r n ) To determine: The residual income on investment for each investment center

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Answer 1

Question

Chapter 24, Problem 11QS

To determine

Introduction:

Return on investment (ROI):

Return on investment is a profitability ratio that represents the percentage return on the investment made. It is calculated by dividing the Net Income by the Average total assets. The formulas to calculate the ROI are as follows:

$R O I = \frac{N e t I n c o m e}{A v e r a g e t o t a l a s s e t s}$

$R O I (E x p a n d e d) = \frac{N e t I n c o m e}{S a l e s} \times \frac{S a l e s}{A v e r a g e t o t a l a s s e t s}$

Or

$R O I = P r o f i t M a r g i n R a t i o \times A s s e t T u r n o v e r r a t i o$

Residual Income (RI):

Residual Income is the income earned over and above the expected rate of return on assets invested in the business. It is calculated by dividing the Sales by Average total assets. The formulas to calculate the Residual Income is as follows:

$R e s i d u a l I n c o m e = N e t I n c o m e - (A v e r a g e a s s e t s \times R e q u i r e d r a t e o r R e t u r n)$

To determine: The residual income on investment for each investment center

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Answer 2

Question

Chapter 24, Problem 11QS

To determine

Introduction:

Return on investment (ROI):

Return on investment is a profitability ratio that represents the percentage return on the investment made. It is calculated by dividing the Net Income by the Average total assets. The formulas to calculate the ROI are as follows:

$R O I = \frac{N e t I n c o m e}{A v e r a g e t o t a l a s s e t s}$

$R O I (E x p a n d e d) = \frac{N e t I n c o m e}{S a l e s} \times \frac{S a l e s}{A v e r a g e t o t a l a s s e t s}$

Or

$R O I = P r o f i t M a r g i n R a t i o \times A s s e t T u r n o v e r r a t i o$

Residual Income (RI):

Residual Income is the income earned over and above the expected rate of return on assets invested in the business. It is calculated by dividing the Sales by Average total assets. The formulas to calculate the Residual Income is as follows:

$R e s i d u a l I n c o m e = N e t I n c o m e - (A v e r a g e a s s e t s \times R e q u i r e d r a t e o r R e t u r n)$

To determine: The residual income on investment for each investment center

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 3

Question

Chapter 24, Problem 11QS

To determine

Introduction:

Return on investment (ROI):

Return on investment is a profitability ratio that represents the percentage return on the investment made. It is calculated by dividing the Net Income by the Average total assets. The formulas to calculate the ROI are as follows:

$R O I = \frac{N e t I n c o m e}{A v e r a g e t o t a l a s s e t s}$

$R O I (E x p a n d e d) = \frac{N e t I n c o m e}{S a l e s} \times \frac{S a l e s}{A v e r a g e t o t a l a s s e t s}$

Or

$R O I = P r o f i t M a r g i n R a t i o \times A s s e t T u r n o v e r r a t i o$

Residual Income (RI):

Residual Income is the income earned over and above the expected rate of return on assets invested in the business. It is calculated by dividing the Sales by Average total assets. The formulas to calculate the Residual Income is as follows:

$R e s i d u a l I n c o m e = N e t I n c o m e - (A v e r a g e a s s e t s \times R e q u i r e d r a t e o r R e t u r n)$

To determine: The residual income on investment for each investment center

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 4

Question

Chapter 24, Problem 11QS

To determine

Introduction:

Return on investment (ROI):

Return on investment is a profitability ratio that represents the percentage return on the investment made. It is calculated by dividing the Net Income by the Average total assets. The formulas to calculate the ROI are as follows:

$R O I = \frac{N e t I n c o m e}{A v e r a g e t o t a l a s s e t s}$

$R O I (E x p a n d e d) = \frac{N e t I n c o m e}{S a l e s} \times \frac{S a l e s}{A v e r a g e t o t a l a s s e t s}$

Or

$R O I = P r o f i t M a r g i n R a t i o \times A s s e t T u r n o v e r r a t i o$

Residual Income (RI):

Residual Income is the income earned over and above the expected rate of return on assets invested in the business. It is calculated by dividing the Sales by Average total assets. The formulas to calculate the Residual Income is as follows:

$R e s i d u a l I n c o m e = N e t I n c o m e - (A v e r a g e a s s e t s \times R e q u i r e d r a t e o r R e t u r n)$

To determine: The residual income on investment for each investment center

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 5

Chapter 24, Problem 11QS

To determine

Introduction:

Return on investment (ROI):

Return on investment is a profitability ratio that represents the percentage return on the investment made. It is calculated by dividing the Net Income by the Average total assets. The formulas to calculate the ROI are as follows:

$R O I = \frac{N e t I n c o m e}{A v e r a g e t o t a l a s s e t s}$

$R O I (E x p a n d e d) = \frac{N e t I n c o m e}{S a l e s} \times \frac{S a l e s}{A v e r a g e t o t a l a s s e t s}$

Or

$R O I = P r o f i t M a r g i n R a t i o \times A s s e t T u r n o v e r r a t i o$

Residual Income (RI):

Residual Income is the income earned over and above the expected rate of return on assets invested in the business. It is calculated by dividing the Sales by Average total assets. The formulas to calculate the Residual Income is as follows:

$R e s i d u a l I n c o m e = N e t I n c o m e - (A v e r a g e a s s e t s \times R e q u i r e d r a t e o r R e t u r n)$

To determine: The residual income on investment for each investment center

Answer 6

Chapter 24, Problem 11QS

To determine

Introduction:

Return on investment (ROI):

Return on investment is a profitability ratio that represents the percentage return on the investment made. It is calculated by dividing the Net Income by the Average total assets. The formulas to calculate the ROI are as follows:

$R O I = \frac{N e t I n c o m e}{A v e r a g e t o t a l a s s e t s}$

$R O I (E x p a n d e d) = \frac{N e t I n c o m e}{S a l e s} \times \frac{S a l e s}{A v e r a g e t o t a l a s s e t s}$

Or

$R O I = P r o f i t M a r g i n R a t i o \times A s s e t T u r n o v e r r a t i o$

Residual Income (RI):

Residual Income is the income earned over and above the expected rate of return on assets invested in the business. It is calculated by dividing the Sales by Average total assets. The formulas to calculate the Residual Income is as follows:

$R e s i d u a l I n c o m e = N e t I n c o m e - (A v e r a g e a s s e t s \times R e q u i r e d r a t e o r R e t u r n)$

To determine: The residual income on investment for each investment center

Answer 7

Chapter 24, Problem 11QS

To determine

Introduction:

Return on investment (ROI):

Return on investment is a profitability ratio that represents the percentage return on the investment made. It is calculated by dividing the Net Income by the Average total assets. The formulas to calculate the ROI are as follows:

$R O I = \frac{N e t I n c o m e}{A v e r a g e t o t a l a s s e t s}$

$R O I (E x p a n d e d) = \frac{N e t I n c o m e}{S a l e s} \times \frac{S a l e s}{A v e r a g e t o t a l a s s e t s}$

Or

$R O I = P r o f i t M a r g i n R a t i o \times A s s e t T u r n o v e r r a t i o$

Residual Income (RI):

Residual Income is the income earned over and above the expected rate of return on assets invested in the business. It is calculated by dividing the Sales by Average total assets. The formulas to calculate the Residual Income is as follows:

$R e s i d u a l I n c o m e = N e t I n c o m e - (A v e r a g e a s s e t s \times R e q u i r e d r a t e o r R e t u r n)$

To determine: The residual income on investment for each investment center

Answer 8

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Answer 9

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Answer 10

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Answer 11

Ch. 24 - Prob. 1DQ Ch. 24 - What is the difference between operating...Ch. 24 - What are controllable costs?Ch. 24 - _________costs are not within the manager’s...Ch. 24 - Prob. 5DQ Ch. 24 - Prob. 6DQ Ch. 24 - Prob. 7DQ Ch. 24 - What is the difference between direct and indirect...Ch. 24 - Prob. 9DQ Ch. 24 - Prob. 10DQ

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