1) Guerlane Fragrance Corporation has a perfume division, Essense, and a cologne division, Karisma. The following information relates to last year's operations at each division. The minimum required rate of return is the same for both divisions. Essense Karisma Sales $360,000 (d) Average operating assets $120,000 (e) Net operating income $10,000 Margin (b) Turnover (c) 2.5 Return on investment (ROI) 20% (f) Residual income $6,000 Required: Compute the unknown quantities above [(a) through (g)]. SHOW YOUR COMPUTATIONS.

1) Guerlane Fragrance Corporation has a perfume division, Essense, and a cologne division, Karisma. The following information relates to last year's operations at each division. The minimum required rate of return is the same for both divisions. Essense Karisma Sales $360,000 (d) Average operating assets $120,000 (e) Net operating income $10,000 Margin (b) Turnover (c) 2.5 Return on investment (ROI) 20% (f) Residual income $6,000 Required: Compute the unknown quantities above [(a) through (g)]. SHOW YOUR COMPUTATIONS.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

1) Guerlane Fragrance Corporation has a perfume division, Essense, and a cologne division, Karisma.
The following information relates to last year's operations at each division. The minimum required rate of
return is the same for both divisions.
Essense
Karisma
Sales
$360,000
(d)
Average operating assets $120,000
(e)
Net operating income
(a)
$10,000
Margin
(b)
5%
Turnover
(c)
2.5
Return on investment (ROI) 20%
(f)
Residual income
$6,000
Required:
Compute the unknown quantities above [(a) through (g)].
SHOW YOUR COMPUTATIONS.

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