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Division A $ 12,280,000 $ 3,070,000 $ 601,720 10.00% Division B $35,350,000 $ 7,070,000 $ 600,950 10.50% Sales. Average operating assets Net operating income Minimum required rate of return. Required: 1. Compute each division's margin, turnover, and return on investment (ROI). Division C $ 20,280,000 $ 5,070,000 $ 567,840 11.20%

Division A $ 12,280,000 $ 3,070,000 $ 601,720 10.00% Division B $35,350,000 $ 7,070,000 $ 600,950 10.50% Sales. Average operating assets Net operating income Minimum required rate of return. Required: 1. Compute each division's margin, turnover, and return on investment (ROI). Division C $ 20,280,000 $ 5,070,000 $ 567,840 11.20%

FINANCIAL ACCOUNTING
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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Sales Average operating assets Net operating income Minimum required rate of return Required: 1. Compute each division's margin, turnover, and return on investment (ROI). 2. Compute each division's residual income (loss). Division A $ 12,280,000 $ 3,070,000 $ 601,720 10.00% 3. Assume each division is presented with an investment opportunity yielding a 11% rate of return. a. If performance is being measured by ROI, which division or divisions will accept the opportunity? b. If performance is being measured by residual income, which division or divisions will accept the opportunity? Complete this question by entering your answers in the tabs below. Division A Division B Division C Margin Required 1 Required 2 Required 3A Required 3B Compute each division's margin, turnover, and return on investment (ROI). Note: Do not round intermediate calculations. Round your answers to 2 decimal places. % % % Turnover ROI Division B $35,350,000 $ 7,070,000 $ 600,950 10.50% Required 1 % % do do Division C $ 20,280,000 $5,070,000 $ 567,840 11.20% % Required 2 >
Transcribed Image Text:Sales Average operating assets Net operating income Minimum required rate of return Required: 1. Compute each division's margin, turnover, and return on investment (ROI). 2. Compute each division's residual income (loss). Division A $ 12,280,000 $ 3,070,000 $ 601,720 10.00% 3. Assume each division is presented with an investment opportunity yielding a 11% rate of return. a. If performance is being measured by ROI, which division or divisions will accept the opportunity? b. If performance is being measured by residual income, which division or divisions will accept the opportunity? Complete this question by entering your answers in the tabs below. Division A Division B Division C Margin Required 1 Required 2 Required 3A Required 3B Compute each division's margin, turnover, and return on investment (ROI). Note: Do not round intermediate calculations. Round your answers to 2 decimal places. % % % Turnover ROI Division B $35,350,000 $ 7,070,000 $ 600,950 10.50% Required 1 % % do do Division C $ 20,280,000 $5,070,000 $ 567,840 11.20% % Required 2 >
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