User Account

All Pages

Compute the return on investment for each division

Assignment Help Accounting Basics
Reference no: EM132513526

Question - Selected sales and operating data for three divisions of different structural engineering firms are given as follows:

 

Division A

Division B

Division C

Sales

$12,840,000

$28,840,000

$26,050,000

Average operating assets

$3,210,000

$7,210,000

$5,210,000

Net operating income

$564,960

$346,080

$755,450

Minimum required rate of return

6.00%

6.50%

14.50%

Required -

1. Compute the return on investment (ROI) for each division using the formula stated in terms of margin and turnover.

2. Compute the residual income (loss) for each division.

3. Assume that each division is presented with an investment opportunity that would yield a 7% rate of return.

a. If performance is being measured by ROI, which division or divisions will probably accept or reject the opportunity?

b. If performance is being measured by residual income, which division or divisions will probably accept or reject the opportunity?

Reference no: EM132513526

Questions Cloud

Describe the information systems controls : Describe the systems-building method used by this firm to develop its information technology system. You can select any of the following methods
What does organization do to minimize impact of challenges : Why do these present such a challenge? What does the organization need to do to minimize the impact of those challenges? Please be sure to validate your opinion
Compute depreciation expense : Estimated production is 36,000 units estimated working hours are 20,000. Compute depreciation expense under each of the methods
Unmanned systems breakdown : Provide a brief description, as well as a picture of the system. Then discuss what type of power source it has. How does it store excess power?
Compute the return on investment for each division : Compute the return on investment (ROI) for each division using the formula stated in terms of margin and turnover. Compute the residual income (loss)
Importance of proper coding : In the report, the Board requires an introductory paragraph that should summarize the role of finance in Health Care Systems, Inc., the primary users
Find a cash flow statement for the year ended : Find a cash flow statement for the year ended 31st March 2004.Total sale for the year were Rs. 20,50,000 out of which cash sales is Rs. 14,20,000.
How situation affects whether personality predicts behavior : Describe how the situation affects whether personality predicts behavior. Describe the differences between person-job fit and person-organization fit.
Describe the systems-building method : Explain how telecommunications tools, Internet connection and wireless technologycan enhancee-business performance

Reviews

Write a Review

Accounting Basics Questions & Answers

  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?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Theory of interest - term structure of interest rates

Term Structure of Interest Rates

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

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