Compute the company’s residual income for the year.
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Exercise 12-2 Residual Income [LO12-2]
Juniper Design Ltd. of Manchester, England, is a company specializing in providing design services to residential developers. Last year the company had net operating income of $410,000 on sales of $2,100,000. The company’s average operating assets for the year were $2,300,000 and its minimum required
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Compute the company’s residual income for the year.
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- Question 8 of 17 A business has the capacity to manufacture 720 electronic components per annum that it sells for $500 each. The variable costs are $270 per component and the fixed costs are $102,000 per year. a. What quantity should it sell in a year to have a net income of $41,000 per year? Round up to the next whole number b. What is the net income per year at capacity? SAVE PROGRESS SUBMIT ASExercise 10-2 Residual Income [LO10-2] Juniper Design Ltd. of Manchester, England, is a company specializing in providing design services to residential developers. Last year the company had net operating income of $500,000 on sales of $1,800,000. The company's average operating assets for the year were $2,000,000 and its minimum required rate of return was 16%. Required: Compute the company's residual income for the year. Residual incomeExercise 10-2 (Algo) Residual Income [LO10-2] Juniper Design Limited of Manchester, England, is a company specializing in providing design services to residential developers. Last year the company had net operating income of $490,000 on sales of $2,000,000. The company's average operating assets for the year were $2,200,000 and its minimum required rate of return was 15%. Required: Compute the company's residual income for the year. Residual income
- Exerise 11-2 Residual Income Juniper Design Ltd. of Manchester , England , is a company specializing in providing design services to residential developers. Last year the company had net operating income of $600,000 on sales of $3,000,000. The company's average operating assets for the year were $2,800,000 and its minimum required rate of return was 18%. Required : Compute the company's residual income for the year.Problem 11-2 You are an employee of University Consultants, Limited, and have been given the following assignment. You are to present an investment analysis of a small retail income-producing property for sale to a potential investor. The asking price for the property is $1,390,000; rents are estimated at $177,920 during the first year and are expected to grow at 2.5 percent per year thereafter. Vacancies and collection losses are expected to be 10 percent of rents. Operating expenses will be 35 percent of effective gross income. A fully amortizing 70 percent loan can be obtained at 6 percent interest for 30 years (total annual payments will be monthly payments x 12). The property is expected to appreciate in value at 3 percent per year and is expected to be owned for five years and then sold. Required: a. What is the first-year debt coverage ratio? b. What is the terminal capitalization rate? c. What is the investor's expected before-tax internal rate of return on equity invested…Exercise 11-1 (Algo) Compute the Return on Investment (ROI) [LO11-1] Alyeska Services Company, a division of a major oll company, provides various services to the operators of the North Slope oll field in Alaska. Data concerning the most recent year appear below: Sales Net operating income Average operating assets Required: 1. Compute the margin. Note: Round your answer to 2 decimal places. 2. Compute the turnover. $ 17,400,000 $ 4,700,000 $ 35,200,000 Note: Round your answer to 2 decimal places. 3. Compute the return on Investment (ROI). Note: Round your Intermediate calculations and final answer to 2 decimal places. 1. Margin 2. Turnover 3. ROI %
- Exercise 14-46 (Algo) Compare ROI Using Net Book and Gross Book Values (LO 14-2, 5) The Street Division of Labrosse Logistics just started operations. It purchased depreciable assets costing $40.0 million and having a four-year expected life, after which the assets can be salvaged for $8.0 million. In addition, the division has $40.0 million in assets that are not depreciable. After four years, the division will have $40.0 million available from these non depreciable assets. This means that the division has invested $80 million in assets with a salvage value of $48.0 million. Annual operating cash flows are $12.8 million. In computing ROI, this division uses beginning-of-year asset values in the denominator. Depreciation is computed on a straight-line basis, recognizing the salvage values noted. Ignore taxes. Required: a. & b. Compute ROI, using net book value and gross book value. Note: Enter your answers as a percentage rounded to 2 decimal place (i.e., 32.10). Year 1 Year 2 Year 3…Exercise 9-8A Return on investment Mitchell Company calculated its return on investment as 13 percent. Sales are now $270,000, and the amount of total operating assets is $450,000. Required a. If expenses are reduced by $27,000 and sales remain unchanged, what return on investment will result? b. If both sales and expenses cannot be changed, what change in the amount of operating assets is required to achieve the same result?Exercise 12-16 (Algo) Calculate selling price of new product; what-if questions; breakeven LO 8, 9, 10, 11 D&R Corp. has annual revenues of $262,000, an average contribution margin ratio of 33%, and fixed expenses of $101,800. Required: Management is considering adding a new product to the company's product line. The new item will have $8.7 of variable costs per unit. Calculate the selling price that will be required if this product is not to affect the average contribution margin ratio. If the new product adds an additional $29,100 to D&R's fixed expenses, how many units of the new product must be sold at the price calculated in part a to break even on the new product? If 20,900 units of the new product could be sold at a price of $14.2 per unit, and the company's other business did not change, calculate D&R's total operating income and average contribution margin ratio.
- Exercise 10-9 Return on Investment (ROI) and Residual Income Relations [LO10-1, LO10-2] A family friend has asked your help in analyzing the operations of three anonymous companies operating in the same service sector industry. Supply the missing data in the table below: (Loss amounts should be indicated by a minus sign. Round your percentage answers to nearest whole percent and other amounts to whole dollars.) Company A C Sales 500,000 800,000 2$ 600,000 Net operating income 2$ 45,000 Average operating assets 2$ 162,000 145,000 Return on investment (ROI) 23 % 19 % % Minimum required rate of return: Percentage 13 % % 14 % Dollar amount $ 50,000 Residual income 7,0001 Jlgu übja 1 Flint Systems is considering investing in production- management software that costs $630,000, has $67,000 residual value, and leads to cost savings of $1,650,000 per year over its five-year life. Calculate the average amount invested in the asset that should be used for calculating the accounting rate of return $697,000 .A $348,500 .B O $67,000 .c O $630,000 .DQUESTION 26 Top management is trying to determine which would be the best choice of the following investment opportunities: Data of investment choices: 1 Sales $10,000,000 Operating income 200,000 Average operating assets 2,000,000 Required: Compute the Residual Income assuming a minimum required rate of return of 8%. $40,000 $0 $50,000 $(40,000)