Reference no: EM132204974
Questions -
Q1. Dallas Products is a division of a major corporation. The following data are for the most recent year of operations:
Sales $38,180,000
Net operating income $3,658,960
Average operating assets $9,700,000
The company's minimum required rate of return 14%.
The division's residual income is closest to:
$(3,877,840)
$2,300,960
$3,658,960
$5,016,960
Q2. ABC Industries is a division of a major corporation. Data concerning the most recent year appears below:
Sales $17,570,000
Net operating income $860,930
Average operating assets $4,950,000
The division's margin is closest to:
17.4%
23.5%
4.9%
18.6%
Q3. ABC Industries is a division of a major corporation. Data concerning the most recent year appears below:
Sales $17,810,000
Net operating income $783,640
Average operating assets $4,640,000
The division's return on investment (ROI) is closest to:
4.40%
16.89%
13.04%
1.40%
Q4. Dallas Products is a division of a major corporation. The following data are for the most recent year of operations:
Sales $37,480,000
Net operating income $3,308,960
Average operating assets $9,000,000
The company's minimum required rate of return 15%.
The division's margin used to compute ROI is closest to:
Q5. Given the following data:
Average operating assets $504,000
Total liabilities $23,520
Sales $168,000
Contribution margin $85,680
Net operating income $45,360
Return on investment (ROI) is:
Q6. ABC Industries is a division of a major corporation. Data concerning the most recent year appears below:
Sales $17,810,000
Net operating income $765,830
Average operating assets $5,100,000
The division's turnover is closest to:
Q7. Which of the following will NOT result in an increase in return on investment (ROI), assuming other factors remain the same?
An increase in sales.
An increase in operating assets.
An increase in net operating income.
A reduction in expenses.
Q8. Gem Industries is a division of a major corporation. 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. The company's minimum required rate of return is 17%.
Required:
a. What is the division's margin? (Round your percentage answer to 2 decimal places.)
b. What is the division's turnover? (Round your answer to 2 decimal places.)
c. What is the division's return on investment (ROI)? (Round percentage your answer to 2 decimal places.)
Q9. If net operating income is $43,000, average operating assets are $215,000, and the minimum required rate of return is 12%, what is the residual income?
$25,800
$8,600
$60,200
$17,200
Q10. The North Division of XYZ Corporation had average operating assets of $1,120,000 and net operating income of $305,200 in January. The company uses residual income to evaluate the performance of its divisions, with a minimum required rate of return of 21%.
Required: What was the North Division's residual income in January?