Division Y Profit before interest and tax P185 000 P172, 000 Capital employed P1, 540, 000 P1, 650, 000 The cost of capital is 10%. Calculate and comment on the p
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The following results are available for Division X and Y:
Division X Division Y
Profit before interest and tax P185 000 P172, 000
Capital employed P1, 540, 000 P1, 650, 000
The cost of capital is 10%.
Calculate and comment on the performance of the departments based on:
a. Return on capital employed (4 marks)
b. Residual incom
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- The following are available for divison X and Y Profit before interest and tax X 185 000 Y172 000 Capital employed X 1 540 000 Y 1 650 000 The cost of capital is 10% comment on the performance of the departments based on a. Return on capital employed b.residual incomeJordan Company has two divisions, which reported the following results for the most recent year. Division I Division II Income ₱ 02,700,000 ₱ 00,600,000 Average invested capital ₱ 18,000,000 ₱ 03,000,000 ROI 15% 20% Imputed interest rate = 10% What is the residual income of Division II? Group of answer choices ₱ 0 ₱ 300,000 ₱ 900,000 ₱ 294,000Part I (1) What is residual income and how is it calculated? (2) Please use the information below to calculate the residual income for Divisions A and B, assuming that the company’s minimum rate of return is 15 percent. Income Invested Sales from Operations Assets Division A $500,000 $ 90,000 $400,000 Division B 800,000 144,000 600,000
- Below is given the data for the assembly division of Charles Corporation: Sales Cost of Sales Operating Expenses $10,000,000 $15,000,000 Average Operating Assets $250,000,000 $310,000,000 2020 2021 $100,000,000 $165,000,000 $22,000,000 $28,000,000 Minimum Required Rate of Return Actual Cost of Capital Income Tax Rate Instructions 1. Compute the margin and turnover ratios for each year 2. Compute the ROI for each year 3. Compute the residual income for each year 4. Compute EVA for Charles Corporation for each year (Note: Round to 2 decimal) MacBook Air 9% 6% 30%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.The following data are available for Segment X of XYZ Company: Net income of the segment $50,000 Contribution to indirect expenses 40,000 Controllable income by manager 48,000 Assets directly used by the manager 360,000 Assets under the control of the segment 240,000 manager Determine the return on investment for evaluating 1. the income performance of the manager of Segment X and 2. the rate of income contribution of the segment. Answer:
- QS 9-14 (Algo) Components of performance measures LO A1, A2 Fill in the blanks in the schedule below for two separate investment centers A and B. Investment Center A B $ ? $ 382,200 $ 1,470,000 $ 11,100,000 $ ? $ ? Sales Income Average assets Profit margin 8% ?% Investment turnover 1.5 Return on investment ?% 12%Calculator Data for Divisions A, B, C, D, and E are as follows: a. Determine the missing items. Round rate of return on investment, profit margin, and investment turnover answers to one decimal place when required. Div. Sales Income from Operations Inv. Assets Rate of Return on Inv. Profit Margin Invest. Turnover A $ $35,000 $200,000 % % 1.6 B $455,000 $ $284,375 16% % C $525,000 $73,500 $ % % 1.2 D $800,000 $ $ % 13.0% 2.5 E $ $ $250,000 % 16.0% 2.0 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?The following are the details from the income statements of division S and division C for the year ending March 2014. Figures in '000 Tshs – Sales revenue 100,000 120,000 - Operating cost - Interest cost 64,000 75,000 | 6,000 10,000 - Capital invested – Capital invested include debt - WACC - Rate of corporate tax - Required; - Calculate NOPAT as adjusted for EVA and also calculate EVA for both the divisions. Which Division performed better. 122,000 150,000 10% 12.5% 40% 44% -
- Determining missing items in return and residual income computations Data for Uberto Company are presented in the following table of rates of return on investment and residual incomes: Invested Assets Income from Operations Return on Investment Minimum Return Minimum Acceptable Income from Operations Residual Income $925,000 $185,000 (a) 15% (b) (c) $775,000 (d) (e) (f) $93,000 $23,250 $450,000 (g) 18% (h) $58,500 (i) $610,000 $97,600 (j) 12% (k) (l) Determine the missing values, identifying each item by the appropriate letter. a. fill in the blank 1% b. $fill in the blank 2 c. $fill in the blank 3 d. $fill in the blank 4 e. fill in the blank 5% f. fill in the blank 6% g. $fill in the blank 7 h. fill in the blank 8% i. $fill in the blank 9 j. fill in the blank 10% k. $fill in the blank 11 l. $fill in the blank 12Determining missing items in return and residual income computations Data are presented in the following table of returns on investment and residual incomes: Invested Assets Operating Income Return on Investment Minimum Return on Investment Minimum Acceptable Operating Income Residual Income $1,200,000 $198,000 (a) 12% (b) (c) $800,000 (d) (e) (f) $120,000 $40,000 $750,000 (g) 14% (h) $90,000 (i) $1,800,000 $441,000 (j) 15% (k) (l) Determine the missing items, identifying each item by the appropriate letter. Round your percentages to one decimal place. a. fill in the blank 1 % b. $fill in the blank 2 c. $fill in the blank 3 d. $fill in the blank 4 e. fill in the blank 5 % f. fill in the blank 6 % g. $fill in the blank 7 h. fill in the blank 8 % i. $fill in the blank 9 j. fill in the blank 10 % k. $fill in the blank 11 l. $fill in the…Determining missing items in return and residual income computations Data are presented in the following table of returns on investment and residual incomes: Invested Assets Operating Income Return on Investment Minimum Return on Investment Minimum Acceptable Operating Income Residual Income $1,200,000 $198,000 (a) 12% (b) (c) $800,000 (d) (e) (f) $120,000 $40,000 $750,000 (g) 14% (h) $90,000 (i) $1,800,000 $441,000 (j) 15% (k) (l) Determine the missing items, identifying each item by the appropriate letter. Round your percentages to one decimal place. a. % b. $ c. $ d. $ e. % f. % g. $ h. % i. $ j. % k. $ l. $