16.89% c. Revise the data in your worksheet as follows: Sales $40,000,000 Net operating income $4,400,000 Average operating assets $10,000,000 Minimum required rate of return 13% A. Comment on the performance of each of the divisions. Minimum required return =, A: RESIDUAL INCOME : Net operating income $1141700 = INCOME FROM OPERATION - (MINIMUM RATE OF RETURN X INVESTED, A: Return on investment is the ratio of net income over investment which is used to evaluate the income, A: Return on investment = Net operating income / Average operating assets, A: Residual Income = Income from Operations -Invested Assets x Minimum rate of return The divi, Gilde Industries is a division of a major oorporation. Sales = $490000 It analysis the organization's ability to increase its return on equity. The following data are for the most recent year of operations: Sales $ 36,480,000 Net operating income $ 2,808,960 Average operating assets $ 8,000,000 The company's minimum required rate of return 16 % The division's residual income is closest to: Multiple Choice, Which of the following do you prefer for business/ economic transactions. The following data are for the most recent year of operations: The division's margin used to compute ROI is closest to: Multiple Choice 34.4% 37.5% 25.0% 9.4% Expert Solution Want to see the full answer? Use the DuPont formula to compute the return on investment and show (A) the profit margin, (B) the investment turnover, and (C) the return on investment. Fusce dui lectu, View answer & additonal benefits from the subscription, Explore recently answered questions from the same subject, Explore documents and answered questions from similar courses, Explore recently asked questions from the same subject. Last year the division had total sales of $21,300,000, net operating income of $575,100, and average operating assets of $5,000,000. 3. The company's minimum required rate of return is 16%. Residual income Turnover? First week only $4.99! a.Using the DuPont formula for return on investment, determine the profit margin, investment turnover, and return on investment of the International Division, assuming that $20,000,000 of assets have been invested in the International Division. You are meeting with your new remote team for the first time. Dacker Products is a division of a major corporation. Required: 1. Last year the division had total sales of $23,510,300, net operating income of $2,562,623, and average operating assets of $7,018,000. e. Suggest an alternative performance measure for motivating division managers to accept new investment opportunities that would increase the overall company income and return on investment. Last year the division had total sales of $21,120,000, net operating income of $2,006,400, and average operating assets of $6,000,000. A: ROI stands for return on investment that shows the return earned by the company on the investment. What is the ROI? What is the residual income? For the Cleaning Products Division, calculate: a. ANSWER= [1] OPTION-(D) IS THE CORRECT ANSWER.8.9%. 2. Requ, Cabal Products is a division of a major corporation. Total assets were $470 million, current liabilities were $104,000,000, and $72,000,000 of the current liabilities are noninterest bearing. Course Hero is not sponsored or endorsed by any college or university. Net Profit = sales - cost of goods, A: Residual income means the income that one might continue to receive even after completion of the, A: Note:- Since you have posted a question with multiple sub-parts, we will solve the first three, A: Working Note: , gh it was immature attempt at humor. average Operating Assets is, A: Profit Margin = Income from Operations / Sales Last year the division had total sales of $23,100,000, income of and average operating assets of $5,500,000. , gh it was immature attempt at humor. The following data are for the most recent year of operations: Sales$ 37,880,000Net operating income$ 3,508,960Average operating assets$ 9,400,000The company's minimum required rate of return14%. A True or False, If investment funds are limited, the net present value of one project should not be compared directly to the net present value of another project unless the initial investments in these projects are equal. A projected income statement for the new product line is as follows: The Specialty Products Division currently has 27,000,000 in invested assets, and Last Resort Industries Inc.s overall return on investment, including all divisions, is 10%. 20.6% B. Last year the division had total sales of $26,320,000, net operating income of $2,424,320, and average operating assets of $7,000,000. You'll get a detailed solution from a subject matter expert that helps you learn core concepts. What is the sales margin? C) Have regularly scheduled performance reviews. Accounting Chapter 11 Flashcards | Quizlet Last year the division had total sales of $10,400,000, net operating income of $540,800, and average operating assets of $2,392,000. It, A: ROI (Return on Investment) is used to measure the efficiency of the business investment by, A: Margin = Earnings * 100/Sales Last year, the division had total sales of $12,880,000, net operating income of $837,200, and average operating assets of $2,833,600. The following data are for the most recent year of operations: $38,380,000 $ 3,758,960 $ 9,900,000 Sales Net operating income Average operating assets The company's minimum required rate of return 15% The division's margin used to compute ROI is closest to: Multiple Choice 35.6% 38.0% 25.8% 9.8%, Managerial Accounting: The Cornerstone of Business Decision-Making. Data concerning the most recent year appears below: Sales $17,610,000; Net operating income $1,021,380; Average operating assets $4,780,000. Dacker Products is a division of a major corporation. Agustin Industries is a division of a major corporation Data concerning A variable interval schedule is one in which a response is reinforced only after an/a, b. unpredictable number of responses are made, c. specified number of responses are made. Using the DuPont formula for return on investment, determine the profit margin, investment turnover, and return on investment of the Consumer Products Division, assuming that 143,750,000 of assets have been invested in the Consumer Products Division. ), Fundamentals of Financial Management, Concise Edition, Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Daniel F Viele, David H Marshall, Wayne W McManus. a; an ): Almendarez Corporation is considering the purchase of a machine that would cost $220,000 and would last for 9 years. What if operating income for the Small Appliances Division was 2,000,000? (Round to three significant digits.) What is the Company's return on sales? Minimum required return (8,000,000X16%)= 1,280,000, $2,808,960 - 1,280,000 = Residual Income - 1,528,960, This site is using cookies under cookie policy . c. Determine the estimated return on investment for the new product line. Last year the division had total sales of $24,048,000, net operating income of $2,765,520, and average operating assets of $6,012,000. (Note: Round answer to two decimal places.) Investment in division X = 379,700, A: Break even sale is the amount which covers all the costs incurred by an entity but do not result in, A: The question is related to Residual Income or Retained Earnings. Cabell Products is a division of a major corporation. 2. Compute the margin and turnover ratios for last year. The company, Cabal Products is a division of a major corporation. The division's residual income is closest to: A: Residual Income Nakama Corporation is considering investing in a project that would have a 4 year expected useful life. The following data are for the most, The company's minimum required rate of return. What is, Gilde Industries is a division of a major corporation. Small AppliancesDivision $25,800 b. $9, Ceder Products is a division of a major corporation. $8,600 c. $60,200 d. $17,200. True or False, Fixed costs may be relevant in a decision. 23.5% c. 4.9% d. 18.6%, ABC Industries is a division of a major corporation. = $136,950 / $415,000 Calculate Xenolds weighted average cost of capital. Last year the division had total sales of $18,690,000, net operating income of $934,500, and average operating assets of $5,233,200. 3. Prepare a segmented income statement for Xenold, Inc., for last year. Get access to this video and our entire Q&A library, What Is Residual Income? Xenold, Inc., manufactures and sells cooktops and ovens through three divisions: Home, Restaurant, and Specialty. The division's, Chace Products is a division of a major corporation. The residual income approach is the measurement of the net income that an investment, A: a. The divisions projected income statement for the coming year is as follows: Required: 1. Last year the division had total sales of $20, 440,000, net operating income of $1, 860, 040, and average operating assets of $7,000,000. $ 9,900,000 The profitability index of the project is closest to (Ignore income taxes. The following data are for the latest year of operations: Sales $24,900,000 Net operating income 900,400 Average operating assets 6,000,000 Corporation's minimum required rate of return 12% Required: a, Eacher Wares is a division of a major corporation. Plainfield Manufacturing earned income of $845,000 from total sales of $9,350,000 and average capital assets of $13,500,000. 38.0% Direct labor 8 $67,500 b. All rights reserved. The following data are for the most recent year of operations: Sales $ 37,880,000 Net operating income $ 3,508,960 Average operating assets $ 9,400,000 The company's minimum required rate of return 14 % The division's residual income is closest to: Which of the following do you prefer for business/ economic transactions. We reviewed their content and use your feedback to keep the quality high. The company's mi, Cabal Products is a division of a major corporation. The minimum, A: Formula; The company. Average investment = $416500 Last year, the division had total sales of $21,520,000, net operating income of $538,000, and average operating of $8,000,000. Xenold, Inc., has been in business for over 15 years and is considered a relatively stable stock, despite its link to the cyclical construction industry. A batch of sugar beets costs $60 to buy from farmers and $19 to crush in the company's plant. 37,080,000 Net operating income $ 3,108,960 Average operating We reviewed their content and use your feedback to keep the quality high. Compute the contribution margin per unit, and calculate the break-even point in units. Based on your computations, write a brief memo to the president of Gridiron Concepts Inc., Knute Holz, evaluating the divisions performance. The company's minimum required rate of return is 12%. = Operating Income - (Minimum required rate of, A: The costvolumeprofit analysis is conducted according to certain assumptions. Access to over 100 million course-specific study resources, 24/7 help from Expert Tutors on 140+ subjects, Full access to over 1 million Textbook Solutions. Turnover = Sales The income tax expense in year 2: The management of Leitheiser Corporation is considering a project that would require an initial investment of $57,000. The company's minimum required rate of return is 13%. [Solved] Dacker Products is a division of a major corporation. The What is the div, Cabal Products is a division of a major corporation. 15% The following data are for the latest year of operations. 2. Aide Industries is a division of a major corporation. What is the sales margin? The company's tax rate is 30%. Calculate Xenolds weighted average cost of capital. Boney Corporation processes sugar beets that it purchases from farmers. Dacker Products is a division of a major corporation - YouTube Required: 1. The following formula used to calculate Residual income as follows under:- The company uses the residual income to evaluate the performance of its divisions, with a minimum required rate of return, Brandon Inc. has provided the following data for last year's operations: Sales $100,000 Net Operating Income $6,000 Average Operating Assets $40,000 Stockholders' equity $25,000 The minimum requi, Brandon Inc. has provided the following data for last year's operations: Sales $100,000 Net operating income $6,000 Average operating assets $40,000 Stockholders equity $25,000 Minimum required a rat. The new machine would replace some old equipment that would be sold for scrap now, yielding $21,300. Last year the division had total sales of $8,790,000, a net operating income of $428,400, and average operating assets of $3,000,000. The following data are for the latest year of operations: Sales $14,720,000 Net operating income $1,000,960 Average operating assets $4,000,000 The, Eacher Wares is a division of a major corporation. Xenold, Inc., has two sources of financing: bonds paying 5 percent interest, which account for 25 percent of total investment, and equity accounting for the remaining 75 percent of total investment. A: DuPont system: Using the DuPont formula for return on investment, determine the profit margin, investment turnover, and return on investment of the Consumer Products Division, assuming that 143,750,000 of assets have been invested in the Consumer Products Division. Required: Compute the (1) operating income, (2) margin and turnover ratios, and (3) ROI. A: Here in this question, we are required to calculate break even point for Division A. The division's turnover is closest to: Multiple Choice O 10.86 O 3.76 O 0.35 O 2.89 4. Last year the division had total sales of $12,270,000, net operating income of $834,360, and average operating assets of $3,190,200. The following data are for the latest year of operations: Sales $5,820,000, Net operating income $436,500, Average operating assets $2,000,000.