Please help with 1-3 thank you!!! Exercise 11-14 (Algo) Evaluating New Investments Using Return on Investment (ROI) and ResidualIncome [LO11-1, LO11-2]Selected sales and operating data for three divisions of different structural engineering firms are given as follows:SalesAverage operating assetsNet operating incomeMinimum required rate of returnRequired:1. Compute the margin, turnover, and return on2. Compute the residual income (loss) for each division.Req 13. Assume that each division is presented with an investment opportunity that would yield a 10% rate of return.a. If performance is being measured by ROI, which division or divisions will probably accept the opportunity?b. If performance is being measured by residual income, which division or divisions will probably accept the opportunity?Complete this question by entering your answers in the tabs below.Req 2Division ADivision A$ 15,200,000$ 3,040,000$ 668,8009.00%MarginReq 3A0/TurnoverDivision B$ 35,200,000$ 7,040,000$ 563,2009.50%investment (ROI) for each division.Compute the margin, turnover, and return on investment (ROI) for each division. (Do not round intermediate calculations.Round your answers to 2 decimal places.)Req 3BDivision C$ 25,200,000$ 5,040,000$ 655,20013.00%ROI0/

Return on investment refers to the minimum return to be earned by the investors over the…

Exercise 11-14 (Algo) Evaluating New Investments Using Return on Investment (ROI) and Resi Income [LO11-1, LO11-2] Selected sales and operating data for three divisions of different structural engineering firms are given as follows: Division C $ 25,200,000 $ 5,040,000 $ 655,200 13.00% Sales Average operating assets Net operating income Minimum required rate of return Division A $ 15,200,000 $ 3,040,000 $ 668,800 9.00% Division B $ 35,200,000 $ 7,040,000 $ 563,200 9.50% Required: 1. Compute the margin, turnover, and return on investment (ROI) for each division. 2. Compute the residual income (loss) for each division. that each division is presented with an investment opportunity that would yield a 10% rate of return. portunity?

Exercise 11-14 (Algo) Evaluating New Investments Using Return on Investment (ROI) and Resi Income [LO11-1, LO11-2] Selected sales and operating data for three divisions of different structural engineering firms are given as follows: Division C $ 25,200,000 $ 5,040,000 $ 655,200 13.00% Sales Average operating assets Net operating income Minimum required rate of return Division A $ 15,200,000 $ 3,040,000 $ 668,800 9.00% Division B $ 35,200,000 $ 7,040,000 $ 563,200 9.50% Required: 1. Compute the margin, turnover, and return on investment (ROI) for each division. 2. Compute the residual income (loss) for each division. that each division is presented with an investment opportunity that would yield a 10% rate of return. portunity?

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter11: Performance Evaluation And Decentralization

Section: Chapter Questions

Problem 32E: Use the following information for Exercises 11-31 and 11-32: Washington Company has two divisions:...

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Deuk Seon have the following investment centers. Several items are missing from the following table of rate of return on investment and residual income. Determine the missing items, identifying each item by the appropriate letter. Department Invested Assets Income from Operations Rate of Return on Investment Min. Rate of Return Min. Amt. of Income from Operations Residual Income Taek (a) (b) (c) 16% P128,000 P10,000 Jung Hwan P850,000 P153,000 (d) 12% (e) (f) Sun woo P825,000 (g) 20% (h) (i) P24,000 Dong Ryong (j) P129,000 24% (k) P60,000 (l) (a) Determine the missing items, identifying each by number. (b) Which division is most profitable in terms of income from operations? (c) Which division is most profitable in terms of rate of return on investment?
Exercise 11-14 (Algo) Evaluating New Investments Using Return on Investment (ROI) and Residual Income [LO11-1, LO11-2] Selected sales and operating data for three divisions of different structural engineering firms are given as follows: Division A Division B Division C Sales $ 12,920,000 $ 28,920,000 $ 26,150,000 Average operating assets $ 3,230,000 $ 7,230,000 $ 5,230,000 Net operating income $ 516,800 $ 462,720 $ 758,350 Minimum required rate of return 7.00% 7.50% 14.50% Required: 1. Compute the margin, turnover, and return on investment (ROI) for each division. 2. Compute the residual income (loss) for each division. 3. Assume that each division is presented with an investment opportunity that would yield a 8% rate of return. a. If performance is being measured by ROI, which division or divisions will probably accept the opportunity? b. If performance is being measured by residual income, which division or divisions will probably accept the opportunity?
Investment Center Sales. Net income Average invested assets Profit margin Investment turnover Return on investment Profit Margin: Investment Center A B Investment Turnover: Investment Center A B Choose Numerator: Investment Center Use the information in the table above to compute each department's contribution to overhead (both in dollars and as a percent). (Round your final answers to 2 decimal places.) Return on investment: A B Choose Numerator: Choose Numerator: 1 A 1 $ $ 584,600 $1,580,000 ? 1 10% ? ?% B $12,200,000 $ $ 1 Choose Denominator: Choose Denominator: 1 Choose Denominator: ? ? ?% 1.3 13% = Profit Margin Profit margin 10.00 % % = Investment Turnover = Investment turnover 1.30 Return on investment = Return on investment % 13.00 %
Return on investment is often expressed as follows: d. Requirements 1. What are the advantages of breaking down the computation into two separate components? 2. Fill in the blanks for the following table: Revenues Income Investment Income as a percentage of revenues Investment turnover ROI Requirement 2. Fill in the blanks for the following table: (Enter investment turnover to the nearest tenth, X.X.) Companies in Same Industry B Income and investment alone shed investment or to its A 1,400,000 $ 210,000 $ 700,000 % Company B does % income. 1,100,000 165,000 % Income Income Revenues Investment Revenues Investment 3% C Now comment on the relative performance of these companies as thoroughly as the data permit. light on comparative performances. Thus, we Company B should emphasize increasing investment turnover by reducing percentage of revenues by increasing only its 5,500,000 1.5% 2.0 = % Company A in terms of income margin. Company B has a Company A's. Company C's income as a…
Use the following information for Exercises 11-31 and 11-32: Washington Company has two divisions: the Adams Division and the Jefferson Division. The following information pertains to last years results: Washingtons actual cost of capital was 12%. Exercise 11-32 Residual Income Refer to the information for Washington Company above. In addition, Washington Companys top management has set a minimum acceptable rate of return equal to 8%. Required: 1. Calculate the residual income for the Adams Division. 2. Calculate the residual income for the Jefferson Division.
Refer to the data given in Exercise 10.8. Required: 1. Compute the residual income for each of the opportunities. (Round to the nearest dollar.) 2. Compute the divisional residual income (rounded to the nearest dollar) for each of the following four alternatives: a. The Espresso-Pro is added. b. The Mini-Prep is added. c. Both investments are added. d. Neither investment is made; the status quo is maintained. Assuming that divisional managers are evaluated and rewarded on the basis of residual income, which alternative do you think the divisional manager will choose? 3. Based on your answer in Requirement 2, compute the profit or loss from the divisional managers investment decision. Was the correct decision made?
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Please see picture for the full problem and table. a-1. Evaluate the performance of the two divisions assuming BMI uses return on investment (ROI). (Round your final answers to nearest whole percentage value.)
Megamart provides the following information on its two investment centers. Investment Center Electronics Sporting goods Sales $ 63,460,000 19,050,000 Income $ 3,173,000 2,286,000 Average Assets $ 16,700,000 12,700,000 Exercise 22-10 (Algo) Computing return on investment and residual income; investing decision LO A1 1. Compute return on investment for each center. Using return on investment, which center is most efficient at using assets to generate income? 2. Assume a target income of 12% of average assets. Compute residual income for each center. Which center generated the most residual income? 3. Assume the Electronics center is presented with a new investment opportunity that will yield a 14% return on investment. Should the new investment opportunity be accepted? The target return is 12%.
Required Information [The following Information applies to the questions displayed below.] Megamart provides the following Information on its two Investment centers. Investment Center Electronics Sporting goods Sales $ 63,460,000 19,050,000 1. Compute return on Investment for each center. Using return on investment, which center is most efficient at using assets to generate Income? 2. Assume a target Income of 12% of average assets. Compute residual income for each center. Which center generated the most residual Income? 3. Assume the Electronics center is presented with a new Investment opportunity that will yield a 14% return on Investment. Should the new Investment opportunity be accepted? The target return is 12%. Complete this question by entering your answers in the tabs below. Numerator: Required 1 Required 2 Required 3 Compute return on investment for each center. Using return on investment, which center is most efficient at using assets to generate income? Income $ 3,173,000…
Select the best answer from the five listed below to fill in the blank The residual income approach to measuring divisional performance measurement is closely related to the method of performance measurement. O a. payback period O b. economic value added O c. return on capital employed O d. internal rate of return O e. accounting rate of return
The vice president of operations of Moab Bike Company is evaluating the performance of two divisions organized as investment centers. Invested assets and condensed income statement data for the past year ending October 31, 20Y9, for each division are as follows: (P14-5) Touring Bike Division Trail Bike Division Sales $1,500,000 $5,00 Cost of goods sold Operating expenses Invested assets 900,000 4,000,000 495,000 968,000 750,000 3,600,000 Instructions 1. Prepare condensed divisional income statements for the year ended October 31, 20Y9, assuming that there were no service department charges. Touting Bike Division Trial Bike Division