User Account

All Pages

Compute the fleet division return on investment

Assignment Help Financial Accounting
Reference no: EM133043776

Problem - The manager of the Fleet division of Potlatch Automotive is evaluated on her division's return on investment and residual income. The company requires that all divisions generate a minimum return on invested assets of 8 percent Consistent failure to achieve this minimum target is grounds for the dismissal of a division manager. The annual cash bonus paid to division managers is 1 percent of residual income in excess of $100,000. The Fleet division's operating margin for the year was $9,439,000, during which time its average invested capital was $56,334,000.

Required -

a. Compute the Fleet division's return on investment and residual income.

b. Will the manager of the Fleet division receive a bonus for her performance? If so, how much will it be?

c. In reporting her investment center's performance for the past 10 years, the manager of the Fleet division accounted for the depreciation of her division's assets by using an accelerated depreciation method allowed for tax purposes. As a result, virtually all of the assets under her control are fully depreciated. How would the use of the accelerated method of depreciation affect ROI?

Reference no: EM133043776

Questions Cloud

What is the present value of this investment : Salvatore has the opportunity to invest in a scheme which will pay $10,000 at the end of each of the next 5 years. What is the present value of this investment
Overview of entrepreneurship and the business : Analyse how they are managing the different aspects of their business relating it to the concepts you have studied so far in this module
How to sketch two cvp analysis graphs : How to Sketch two CVP analysis graphs for the clinic-one with number of visits on the x -axis and one with number of members on the x -axis in excel
Calculate the intrinsic value of mzansiwood limited : Calculate the intrinsic value of Mzansiwood Limited by using a residual income model, assuming that after three years continuing residual income falls to zero
Compute the fleet division return on investment : The Fleet division's operating margin for the year was $9,439,000, during which time its average invested capital was $56,334,000. Compute the Fleet division
Prepare a statement of financial position : Identify possible limitations of the Statement of financial position for Ventures and Explain how London Ltd can effectively manage
Advise pjh bhd on the accounting treatment of the gain : Advise PJH Bhd on the accounting treatment of the gain or loss on disposal for the above situation according to MFRS 9 Financial Instruments
Who will be bear the responsibility for reporting : Interest paid to the end of the year amounted to $500. Who will be bear the responsibility for reporting this interest on their tax return
Acceptable use policy-antivirus expectations : Write an acceptable use policy in your own word for each. Company network, including passwords

Reviews

Write a Review

Financial Accounting Questions & Answers

  Financial statement analysis and preparation

Financial Statement Analysis and Preparation

  Shareholder of a company

Describe the ways that a person can become a shareholder of a company. Why Wal-Mart would split its stock?

  Financial and accounting principles

An understanding of financial and accounting principles can be a valuable tool for managers. While not all managers will find themselves calculating financial ratios or preparing annual financial data.

  Prepare a statement of cash flow using the direct method

Prepare a Statement of Cash Flow using the Direct Method and Prepare the Operations section of the Statement of Cash Flow using the Indirect Method.

  Financial accounting assignment

This assignment has one case study and two question apart from case study. Questions related to document Liquidation question and Company financial statements question - Torquay Limited

  Prepare general journal entries for goela

Prepare general journal entries for Goela Ltd

  Principles of financial accounting

Prepare the journal entry to record the acquisition of the assets.

  Prepare general journal entries to record the transactions

Prepare general journal entries to record the transactions, assuming use of the periodic inventory system

  Global reporting initiative

Compare the view espoused by the economist Milton Friedman about the social responsibilities of business with the views express by Stigler.

  Explain the iasb conceptual frameworks

Explain the IASB Conceptual Framework's perspective of users and their decisions.

  Determine the company''s financial statements

T he focus of the report is to determine the extent to which you are comfortable relying on the financial statements as presented by management .

  Computation of free cash flow

Computation of Free Cash Flow

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