XTreme Sports Company makes snowboards, downhill skis, cross-country skis, skateboards, surfboards, and in-line skates. The company has found it beneficial to split operations into two divisions based on the climate required for the sport: Snow Sports and Non-Snow Sports. The following divisional information is available for the past year: (Click the icon to view the information.) Compute each division's residual income. Interpret your results. Are your results consistent with each division's ROI? First enter the formula, then calculate each divisions residual income. Data table Snow Sports Non-Snow Sports Sales $ 5,100,000 $ 8,200,000 $ ) = Residual income Operating Income Total Assets Current Liabilities ROI 867,000 $ 1,394,000 $ 4,000,000 $ 6,200,000 $ 720,000 420,000 21.7% 22.5% XTreme's management has specified a target 13% rate of return. ☑
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- 5. XTreme Sports Company makes snowboards, downhill skis, cross-country skis, skateboards, surfboards, and in-line skates. The company has found it beneficial to split operations into two divisions based on the climate required for the sport: Snow Sports and Non-Snow Sports. The following divisional information is available for the past year: ¹(Click the icon to view the information.) Compute each division's residual income. Interpret your results. Are your results consistent with each division's ROI? First enter the formula, then calculate each divisions residual income. (1) (2) Snow Non-Snow Interpret your results. This result is (6). 1: Data Table XTreme's management has specified a target 15% rate of return. (1) O with the ROI calculations. O Capital turnover O Current liabilities O Operating income Both divisions have (4) residual income. This means that the divisions are earning income at a rate that (5). Are your results consistent with each division's ROI? O Sales O Total…Driver Sports Company makes snowboards, downhill skis, cross-country skis, skateboards, surfboards, and in-line skates. The company has found it beneficial to split operations into two divisions based on the climate required for the sport: Snow Sports and Non-Snow Sports. The following divisional information is available for the past year: E (Click the icon to view the information.) Read the requirements. Requirements Data table 1. Calculate each division's ROI. Sales Operating Income Total Assets Current Liabilities 2. Top management has extra funds to invest. Which division will most likely receive those funds? Why? 3. Can you explain why one division's ROI is higher? How could management gain more insight? Snow Sports $ 5,300,000 $ 990,000 $ 4,400,000 $ 400,000 Non-Snow Sports 8,400,000 $ 816,000 $ 3,400,000 $ 650,000 Driver's management has specified a target 15% rate of return. Print Done Print DoneZuds, Helpful Hardware's manufacturing division of lawn-mowing and snow removal equipment, segments its business according to customer type: Professional and Residential. The following divisional information was available for the past year. View the divisional information. Requirements Round all of your answers to four decimal places. 1. Calculate each division's ROI. 2. Calculate each division's profit margin. Interpret your results. 3. Calculate each division's asset turnover. Interpret your results. 4. Use the expanded ROI formula to confirm your results from Requirement 1. What can you conclude?
- Zachs, a national manufacturer of lawn-mowing and snow-blowing equipment, segments its business according to customer type: professional and residential. The following divisional information was available for the past year: 1(Click the icon to view the information.) Calculate each division's RI. Interpret your results. First, select the formula to calculate residual income (RI). (1) – ( (2) × (3) ) = RI The residential division's RI is . The professional division's RI is . (4) exceeding management's expectations. 1: Data Table Net Sales Revenue Operating Income Average Total Assets Residential $570,000 $64,600 $190,000 Professional 1,090,000 164,000 400,000 Management has a 27% target rate of return for each division. (1) Asset turnover ratio Average total assets Net sales revenue Operating…Submit test Test Sports Company makes snowboards, downhill skis, cross-country skis, skateboards, surfboards, and inline skates. The company has found it beneficial to split operations into two divisions based on the climate required for the sport: Snow Sports and Non-snow Sports. The following divisional information is available for the past year: (Click the icon to view the information.) Test's management has specified a 13% target rate of return. Compute each division's RI. Interpret your results. Are your results consistent with each division's ROI? First, select the formula to calculate residual income (RI). 1) = RI The RI for the Snow Sports division is The RI for the Non-snow Sports division is Both divisions have residual income. This means that the divisions are earning income at a rate that management's minimum expectations. Are your results consistent with each division's ROI? This result is with the ROI calculations. 4 12 144Driver Sports Company makes snowboards, downhill skis, cross-country skis, skateboards, surfboards, and inline skates. The company has found it beneficial to split operations into two divisions based on the climate required for the sport: Snow Sports and Non-snow Sports. The following divisional information is available for the past year View the data. Driver Sports Company's management has specified a 16% target rate of return. Compute each division's RI. Interpret your results. Are your results consistent with each division's ROM First, select the formula to calculate residual income (RI). Residual income Operating income- (Target rate of retum x Average total assets) The Ri for the Snow Sports division=
- , a national manufacturer of lawn-mowing and snow-blowing equipment, segments its business according to customer type: Professional and Residential. Assume the following divisional information was available for the past year (in thousands of dollars):Dantrell Palmer has just been appointed manager of Kirchner Glass Products Division. He has two years to make the division profitable. If the division is still showing a loss after two years, it will be eliminated, and Dantrell will be reassigned as an assistant divisional manager in another division. The divisional income statement for the most recent year is as follows: Upon arriving at the division, Dantrell requested the following data on the divisions three products: He also gathered data on a proposed new product (Product D). If this product is added, it would displace one of the current products; the quantity that could be produced and sold would equal the quantity sold of the product it displaces, although demand limits the maximum quantity that could be sold to 20,000 units. Because of specialized production equipment, it is not possible for the new product to displace part of the production of a second product. The information on Product D is as follows: Required: 1. Prepare segmented income statements for Products A, B, and C. 2. Determine the products that Dantrell should produce for the coming year. Prepare segmented income statements that prove your combination is the best for the division. By how much will profits improve given the combination that you selected? (Hint: Your combination may include one, two, or three products.)Performance Auto Company operates a new car division (that sells high performance sports cars) and a performance parts division (that sells performance-improvement parts for family cars). Some division financial measures for 2017 are as follows: E (Click the icon to view the data.) Read the requirements. Data table rounded to one decimal place in the format X.X%.) Requirements New Car Performance 1. Calculate return on investment (ROI) for each division using operating income as a measure of income and total assets as a measure of investment. Division Parts Division 2. Calculate residual income (RI) for each division using operating income as a Total assets 2$ 35,000,000 $ 32,312,500 measure of income and total assets minus current liabilities as a measure of investment. Current liabilities 2$ 6,500,000 $ ৪,000,000 3. William Abraham, the New Car Division manager, argues that the performance parts division has "loaded up on a lot of short-term debt" to boost its RI. Operating income $4…
- Kalu Company, a national manufacturer of lawn-mowing and snow-blowing equipment, segments its business according to customer type: professional and residential. The following divisional information was available for the past year: View the information. Management has a 23% target rate of retum for each division. Calculate each division's RI. Interpret your results. First, select the formula to calculate residual income (RI). Residual income= Residential division's Ri= Professional division's RI 196000 exceeding management's expectations. COO Information Net Sales Revenue Residential $ Professional Operating Income 600,000 $ 1,180,000 Print 66,640 S 162,360 Done 1 Average Total Assets 196.000 396,000 XAdams Corporation evaluates divisional managers based on Return on Investment (ROI) and has provided the operating results of the Northern DIVislon from last year. The Controller has asked you to compute the ROI and Residual Income based on data from last year and If the alvislon adds a new product line. Use the Information Included in the Excel Simulation and the Excel functions described below to complete the task. • Cell Reference: Allows you to refer to data from another cell in the worksheet. From the Excel Simulation below, if in a blank cell, "=G5" was entered, the formula would output the result from cell G5, or 4.00 In this example. • Basic Math functions: Allows you to use the basic math symbols to perform mathematical functions. You can use the following keys: - (plus sign to add), - (minus sign to subtract). * (asterisk sign to multiply), and (forward slash to divide). From the Excel Simulation below, If in a blank cell "=G5-G6" was entered, the formula would add the values…Navarre Energy Research specializes in developing and commercializing new products. It is organized into two divisions, which are based on the products they produce. Canal Division is smaller, and the lives of the products it produces tend to be shorter than those produced by the larger Lake Division. Selected financial data for the past year are shown in the following table. Divisional investment is as of the beginning of the year. Navarre uses an 8 percent cost of capital and beginning-of-the-year investment when computing ROI and residual income. Ignore income taxes. Division Canal ($000) Lake ($000) Allocated corporate overhead $ 4,100 $ 9,600 Cost of goods sold 20,000 30,000 Divisional investment 60,100 400,000 R&D 12,000 32,000 Sales 50,000 100,000 Selling, general and administrative (excluding R&D) 4,500 8,000 R&D is assumed to have a three-year life in Canal Division and an eight-year life in Lake Division. All R&D expenditures are spent…