User Account

All Pages

Calculate the company return on investment

Assignment Help Managerial Accounting
Reference no: EM132543171

Evaluation of Decentralized Organizations

The Clipper Corporation had net operating income of $380,000 and average operating assets of $2,000,000. The corporation requires a return on investment of 18%.

Required:

Question a. Calculate the company's return on investment (ROI) and residual income (RI).

Question b. Clipper Corporation is considering an investment of $70,000 in a project that will generate annual net operating income of $12,950. Would it be in the best interests of the company to make this investment?

Question c. Clipper Corporation is considering an investment of $70,000 in a project that will generate annual net operating income of $12,950. If the division planning to make the investment currently has a return on investment of 20% and its manager is evaluated based on the division's ROI, will the division manager be inclined to request funds to make this investment?

Question d. Clipper Corporation is considering an investment of $70,000 in a project that will generate annual net operating income of $12,950. If the division planning to make the investment currently has a residual income of $50,000 and its manager is evaluated based on the division's residual income, will the division manager be inclined to request funds to make this investment?

Reference no: EM132543171

Questions Cloud

How much are her monthly payments : She is financing $275,500 and obtained a 25-year, fixed-rate mortgage with a 5.875% interest rate. How much are her monthly payments
Find the variances for raw materials and direct labor : Find the variances for raw materials, direct labor, and variable overhead, assuming that the price variance for materials is recognized
What is the present value of this series of cash inflows : Assume you will receive $3,000 every year for 3 years, and the appropriate interest rate is 6% per year. What is the present value of series of cash inflows
Return on investment-education funding : Analyze your desired occupation. Determine how much compensation (return) you expect to earn and how long will it take to pay back the return
Calculate the company return on investment : Would it be in the best interests of the company to make this investment? Calculate the company's return on investment (ROI) and residual income (RI).
Retirement planning : Your friend is asking for advice. She is planning to retire in 40 years and wants to know what investments she should choose.
How much will you receive at the end : They promise to give it back to you in 5 years, along with interest at a rate of 4% per year. How much will you receive at the end
Ethics in cost control : Discuss a possible negative managerial scenario that the regional manager may be sensing. Might the manager of Store 9 be an exceptional manager?
What is the maximum monthly rent : What is the maximum monthly rent the company should be willing to pay for this machine (assuming they've made optimal use of their own machine)

Reviews

Write a Review

Managerial Accounting Questions & Answers

  What is the companys over-all break-even point

What is the company's over-all break-even point in dollar sales? (Round CM ratio to 4 decimal places and final answer to the nearest whole dollar.

  Would an unexpected increase in sales and production result

Would an unexpected increase in sales and production result in under applied or over applied overhead? Explain.

  What are the managerial implications from the revised cost

Explain how management accounting change applies to this case study. Try to relate your answer to the Burns and Scapens (2000) reading.

  Find budgeted merchandise purchases for september amount

The desired ending inventory level is 25% of next month's cost of merchandise sold. Budgeted merchandise purchases for September amount to

  Identify the sunk cost

Should Noble sell the acetone as is or process it into lacquer thinner? Show the expected net revenue difference between the two alternatives

  Find what was the actual number of total machine hours

Find What was the actual number of total machine hours? The production of each unit of replica memorabilia has a standard of using 4 machine hours

  Compute the margin of safety in dollars

Compute operating leverage. If the company increases sales by 10%, how much will net income increase in dollars? Compute the margin of safety in dollars

  Measuring innovation

This Project is about researching and preparing a four-part presentation in order to succinctly describe and evaluate four contemporary managerial accounting theories or models that are commonly applied in business settings.

  What price should shortech charge now

What price should ShorTech charge now?When ShorTech introduced its Quadrant mobile phone, it had few competitors and so it set a price

  Preparing an ending finished goods inventory budget

Preparing an Ending Finished Goods Inventory Budget. Calculate the cost of budgeted ending inventory. Round your answer to the nearest dollar.

  What are the budgeted sales for february

If 68,300 pounds of direct materials are needed for production in March, how many pounds of direct materials should be purchased in February?

  Find relevant range and total expected maintenance cost

The relevant range, total expected maintenance cost for a budgeted activity level of 10,000 machine hours would be closest to which of the following?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd