FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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37.
lows:
Nantucket Company has two divisions that report on a decentralized basis. Their results for 2016 were as fol-
Sales
Income
Asset base
Weighted average cost of capital
Required:
Compute the following amounts for each division:
Return on investment (ROI).
Residual income if the desired rate of return is 20 percent.
Turnover.
Margin for each division.
Helmet
$150,000
$ 15,000
$ 75,000
12%
Ball
$300,000
$ 45,000
$150,000
12%
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Transcribed Image Text:37. lows: Nantucket Company has two divisions that report on a decentralized basis. Their results for 2016 were as fol- Sales Income Asset base Weighted average cost of capital Required: Compute the following amounts for each division: Return on investment (ROI). Residual income if the desired rate of return is 20 percent. Turnover. Margin for each division. Helmet $150,000 $ 15,000 $ 75,000 12% Ball $300,000 $ 45,000 $150,000 12%
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