Explanation Return on investment (ROI): This financial ratio evaluates how efficiently the assets are used in earning income from operations. So, ROI is a tool used to measure and compare the performance of a units or divisions or a companies. Formula of ROI: Return on investment = Operating income Operating assets Operating profit margin: This ratio gauges the operating profitability by quantifying the amount of income earned from business operations from the sales generated. Formula of operating profit margin: Operating profit margin = Operating income Sales Investment turnover: This ratio gauges the operating efficiency by quantifying the amount of sales generated from the assets invested. Formula of investment turnover: Investment turnover = Sales Operating assets Formula of ROI according to DuPont formula: Return on investment = Profit margin × Investment turnover = Operating income Sales × Sales Operating assets = Operating income Operating assets Residual income: The excess of income from operations over the desired acceptable income is referred to as residual income. Formula of residual income: Residual income = Operating income – ( Operating assets × Desired rate of return on investment ) Compute ROI for Company U, using DuPont formula . Return on investment = Profit margin × Investment turnover = 0 .08×2 .2 = 0

Fundamental Managerial Accounting Concepts

8th Edition

ISBN: 9781259569197

Author: Thomas P Edmonds, Christopher Edmonds, Bor-Yi Tsay, Philip R Olds

Publisher: McGraw-Hill Education

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Chapter 9, Problem 11ESA

To determine

Compute the missing figures.

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Chapter 9, Problem 10ESA

Chapter 9, Problem 12ESA

Chapter 9 Solutions

Fundamental Managerial Accounting Concepts

Ch. 9 - Prob. 1LO Ch. 9 - Prob. 2LO Ch. 9 - Prob. 3LO Ch. 9 - Prob. 4LO Ch. 9 - Prob. 1Q Ch. 9 - Prob. 2Q Ch. 9 - Prob. 3Q Ch. 9 - Prob. 4Q Ch. 9 - 5. How does the concept of predominant control as...Ch. 9 - Prob. 6Q

Ch. 9 - Prob. 7Q Ch. 9 - Prob. 8Q Ch. 9 - Prob. 9Q Ch. 9 - Prob. 10Q Ch. 9 - Prob. 11Q Ch. 9 - Prob. 12Q Ch. 9 - Prob. 13Q Ch. 9 - Prob. 14Q Ch. 9 - Prob. 15Q Ch. 9 - 16. If cost is the basis for transfer pricing,...Ch. 9 - Prob. 1ESA Ch. 9 - Prob. 2ESA Ch. 9 - Prob. 3ESA Ch. 9 - Prob. 4ESA Ch. 9 - Prob. 5ESA Ch. 9 - Prob. 6ESA Ch. 9 - Prob. 7ESA Ch. 9 - Prob. 8ESA Ch. 9 - Prob. 9ESA Ch. 9 - Prob. 10ESA Ch. 9 - Prob. 11ESA Ch. 9 - Prob. 12ESA Ch. 9 - Prob. 13ESA Ch. 9 - Prob. 14ESA Ch. 9 - Prob. 15ESA Ch. 9 - Problem 9-16A Determining controllable costs Juan...Ch. 9 - Problem 9-17A Controllability, responsibility, and...Ch. 9 - Prob. 18PSA Ch. 9 - Prob. 19PSA Ch. 9 - Prob. 20PSA Ch. 9 - Prob. 21PSA Ch. 9 - Prob. 22PSA Ch. 9 - Prob. 23PSA Ch. 9 - Prob. 24PSA Ch. 9 - Prob. 1ESB Ch. 9 - Prob. 2ESB Ch. 9 - Prob. 3ESB Ch. 9 - Prob. 4ESB Ch. 9 - Prob. 5ESB Ch. 9 - Prob. 6ESB Ch. 9 - Prob. 7ESB Ch. 9 - Prob. 8ESB Ch. 9 - Prob. 9ESB Ch. 9 - Prob. 10ESB Ch. 9 - Exercise 9-11B Supply missing information...Ch. 9 - Prob. 12ESB Ch. 9 - Prob. 13ESB Ch. 9 - Prob. 14ESB Ch. 9 - Prob. 15ESB Ch. 9 - Problem 9-16B Determining controllable costs At a...Ch. 9 - Prob. 17PSB Ch. 9 - Prob. 18PSB Ch. 9 - Prob. 19PSB Ch. 9 - Prob. 20PSB Ch. 9 - Prob. 21PSB Ch. 9 - Prob. 22PSB Ch. 9 - Prob. 23PSB Ch. 9 - Problem 9-24B Transfer pricing (Appendix) Gardner...Ch. 9 - Prob. 1ATC Ch. 9 - Prob. 3ATC Ch. 9 - Prob. 4ATC Ch. 9 - Prob. 5ATC Ch. 9 - Prob. 6ATC Ch. 9 - Prob. 7ATC Ch. 9 - Prob. 1CP

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