Computation of segment return

Assignment Help Accounting Basics
Reference no: EM1319540

The Eastern Division of Taxes Chemical Co. produced the following operating results for the previous year:

Sales

$10,000,000

Segment income

1,500,000

Assets

6,000,000

The Eastern Division is considering a $1,000,000 investment in a new project. The Eastern Division estimates that its return on investment (for all its operations) would be at 22% with the new investment.

Refer to Eastern Division. How much net segment income is the new project expected to produce?

Refer to Eastern Division. If the manager of the Eastern Division is evaluated on return on investment alone, will the manager invest in the new project? Explain.

Reference no: EM1319540

Questions Cloud

Amount of return on investment and residual income : Compute the sales level that would generate a 20% return on investment. Supposing the rate of return is 15%, determine the level of sales that would generate $200,000 of residual income.
What a manufacturer of each product might do : Describe what a manufacturer of each product might do in the short run to raise production.
Aspect of software engineering : Select a topic related to some aspect of the Software Engineering. Write about 2500+ word (minimum) paper on that particular topic-single spaced 12 pt times or times new roman font.
Hazard rate in survival analysis by exponential distribution : A function sometimes associated with a continuous nonnegative random variable is the failure rate (or hazard rate) function which is defined as:
Computation of segment return : If the manager of the Eastern Division is evaluated on return on investment alone, will the manager invest in the new project? Explain.
Computing degrees of freedom for f statistic : Store used ANOVA to test if mean sales for each credit card were equal. What are the degrees of freedom for F statistic?
Competitive industry is comprised of identical firms : a competitive industry is comprised of 15 identical firms, each with a short-run total cost function
Preparation of pro forma balance and interpretation : Prepare a pro forma balance sheet dated December 31, 2008. Discuss the financing changes suggested by the statement prepared in part A.
Valid probability distribution : Find the value of k that makes f(x; y) a valid probability distribution.

Reviews

Write a Review

Accounting Basics Questions & Answers

  Amount of outstanding checks

Fitzgerald Company wrote checks totalling $17,080 during October and $18,650 during November. What was the amount of outstanding checks on November 30?

  Reported net asset balance of categories

What should be the reported net asset balance of the following categories during 2011: permanent restricted, temporarily restricted, unrestricted.

  Cash basis and accrual basis of accounting

In its first year of operations, Harden Co. earned $39,000 in revenues and received $33,000 cash from these customers-Calculate the first year’s net income under both the cash basis and the accrual basis of accounting.

  Set up necessary t accounts

A business paid 100 to cash to Karen Smith (the owner of the business) for her personal use. Set up the necessary T accounts and show how this transaction would be recorded directly to those accounts

  Short term profitability exist of government

In business, there is a tension between the principals (stockholders) and agents (managers). The managers may choose policies that increase short-term profitability (and their bonuses) at the expense of long-term profitability.

  Method of amortising discounts and premiums

The firm uses the effective interest method of amortising discounts and premiums. The bonds were sold to yield an effective interest rate of 10%.

  Warranty accrual decision

Cameron Bly is a sales manager for an automobile dealership-Does the warranty accrual decision create any ethical dilemma for Bly? Since warranty expenses vary, what percent do you think Bly should choose for the current year? Justify your response.

  Tax effect of rental use

Kristen's AGI is $120,000 before considering effect of rental activity. What is Kristen's AGI after considering the tax effect of rental use of her home?

  Financial statements in accordance with gaap

Texark Inc., a calendar year taxpayer, reported $5,210,300 net income before tax on its financial statements prepared in accordance with GAAP. The corporation's records reveal the following information.

  Finding the balance in right-of-use asset

Warren Co. recorded a right-of-use asset of $900,000 in 8-year lease under which no profit was recorded at commencement by lessor-The balance in right-of-use asset after 2 years will be:

  Calculate the breakeven point in units

Provide for a general definition of the income statement, its purpose as well as its relation to the Balance Sheet and Cash Flow statements

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

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!

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