Estes Company has assembled the following data for its divisions for the past year: Average operating assets. Sales Net operating income Turnover... Margin Minimum required rate of return Residual income..... Division B's return on investment is: O $6,000 32% O 20% 16% Division A Division B $500,000 ? ? $100,000 1.25 ? 14% ? $520,000 $20,300 4 3.9% ? $6,000

FINANCIAL ACCOUNTING
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Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Estes Company has assembled the following data for its divisions for the past year:
Average operating assets..
Sales .....
Net operating income.
Turnover....
Margin.........
Minimum required rate of return .....
Residual income..........
Division B's return on investment is:
$6,000
32%
20%
16%
Division A Division B
$500,000
?
?
$100,000
1.25
?
14%
?
$520,000
$20,300
4
3.9%
?
$6,000
Transcribed Image Text:Estes Company has assembled the following data for its divisions for the past year: Average operating assets.. Sales ..... Net operating income. Turnover.... Margin......... Minimum required rate of return ..... Residual income.......... Division B's return on investment is: $6,000 32% 20% 16% Division A Division B $500,000 ? ? $100,000 1.25 ? 14% ? $520,000 $20,300 4 3.9% ? $6,000
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