For its three investment centers, Flint-Company accumulates the following data: Sales Controllable margin Average operating assets 11 $2,360,000 $4,720,000 1,770,000 5,900,000 The expected return on investment 111 $4,720,000 2,548,800 4,455,360 9,540,000 11,800,000 The company expects the following changes for investment centers I, II, and III in the next year: investment center I to increase sales 15%, investment center Il to decrease controllable fixed costs $504,000, and investment center III to decrease average operating assets $376,000. Compute the expected return on investment (ROI) for each center. Assume investment center I has a contribution margin percentage of 75%. (Round ROI to 1 decimal place, e.g. 1.5%) % 111 %

For its three investment centers, Flint-Company accumulates the following data: Sales Controllable margin Average operating assets 11 $2,360,000 $4,720,000 1,770,000 5,900,000 The expected return on investment 111 $4,720,000 2,548,800 4,455,360 9,540,000 11,800,000 The company expects the following changes for investment centers I, II, and III in the next year: investment center I to increase sales 15%, investment center Il to decrease controllable fixed costs $504,000, and investment center III to decrease average operating assets $376,000. Compute the expected return on investment (ROI) for each center. Assume investment center I has a contribution margin percentage of 75%. (Round ROI to 1 decimal place, e.g. 1.5%) % 111 %

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter11: Performance Evaluation And Decentralization

Section: Chapter Questions

Problem 27E: Margin, Turnover, Return on Investment, Average Operating Assets Elway Company provided the...

See similar textbooks

Similar questions

For its three investment centres, Stahl Company accumulates the following data: Centre I Centre II Centre III Sales $1,971,600 $4,003,000 $3,944,000 Controllable margin 788,640 2,346,970 3,643,800 Average operating assets 4,929,000 8,093,000 12,146,000 The centres expect the following changes in the next year: Centre I a 20% increase in sales; Centre II a $323,720 decrease in costs; and Centre III a $485,840 decrease in average operating assets.Calculate the expected return on investment for each centre. Assume Centre I has a contribution margin percentage of 80%. (Round ROI to 2 decimal places, e.g. 1.57%.) Centre I Centre II Centre III The expected return on investment % % %
For its three investment centers, Indigo Company accumulates the following data: Sales Controllable margin Average operating assets 1 $2,400,000 $4,800,000 $4,800,000 1,560,000 2.208,000 6,000,000 9,600,000 The return on investment i 11 Compute the return on investment (ROI) for each center. % 111 4,080,000 12,000,000 HE %
For its three investment centers, Gerrard Company accumulates the following data: I II III Sales $2,062,000 $3,914,000 $3,905,000 Controllable margin 848,640 2,161,620 4,103,120 Average operating assets 4,992,000 8,006,000 12,068,000 Compute the return on investment (ROI) for each center. I II III The return on investment % % % eTextbook and Media
For its three investment centers, Gerrard Company accumulates the following data: I II III Sales $2,000,000 $4,000,000 $4,000,000 Controllable margin 1,400,000 2,000,000 3,600,000 Average operating assets 5,000,000 8,000,000 10,000,000 Compute the return on investment (ROI) for each center. I II III The return on investment enter percentages % enter percentages % enter percentages %
For its three investment centers, Flint Company accumulates the following data: || III Sales $2,360,000 $4,720,000 $4,720,000 Controllable margin 1,770,000 2,548,800 4,484,000 Average operating assets 5,900,000 9,440,000 11,800,000 Compute the return on investment (ROI) for each center. The return on investment % % III %
For its three investment centers, Ayayai Company accumulates the following data: Sales Controllable margin Average operating assets $2,480,000 1,736,000 6,200,000 The return on investment 11 $4,960,000 2.480,000 9,920.000 Compute the return on investment (ROI) for each center. 25 % 111 $4,960,000 4,464,000 12.400.000 11 21.43 m 24 96
Selected data from an investment center of IROL Inc. follow:Sales $8,000,000Net book value of assets, beginning 2,500,000Net book value of assets, ending 2,600,000Net operating income 640,000Minimum rate of return 12%Required1. Calculate return on sales (ROS), asset turnover (AT), and return on investment (ROI).2. Calculate residual income (RI).
For its three investment centres, Stahl Company accumulates the following data: Centre I Centre il Centre III Sales $1,996,000 $4,043,000 $3,962,000 Controllable margin 785,760 2,663,760 4,372,200 Average operating assets 4,911,000 8,072,000 12,145,000 Calculate the return on investment (ROI) for each centre. The return on investment Centre I % Centre II % Centre III
Two investment centers at Marshman Corporation have the following current-year income and asset data: Investment Investment Center A Center B Investment center income $ 410,000 $ 524,700 Investment center average invested assets $2,430,000 $1,980,000 The return on investment (ROI) for Investment Center B is: Multiple Choice 38.5% 21.2% 25.5% 377.4%
Required Information [The following Information applies to the questions displayed below.] Megamart provides the following Information on its two Investment centers. Investment Center Electronics Sporting goods Sales $ 63,460,000 19,050,000 1. Compute return on Investment for each center. Using return on investment, which center is most efficient at using assets to generate Income? 2. Assume a target Income of 12% of average assets. Compute residual income for each center. Which center generated the most residual Income? 3. Assume the Electronics center is presented with a new Investment opportunity that will yield a 14% return on Investment. Should the new Investment opportunity be accepted? The target return is 12%. Complete this question by entering your answers in the tabs below. Numerator: Required 1 Required 2 Required 3 Compute return on investment for each center. Using return on investment, which center is most efficient at using assets to generate income? Income $ 3,173,000…
During the current year, a strategic business unit (SBU) within Roke Inc. saw costs increase by $2 million, revenues increase by $4 million, and assets decrease by $1 million. SBUs are set up by Roke as follows I. Cost SBU II. Revenue SBU III. Profit SBU IV. Investment SBU
Margin, Turnover, Return on Investment, Average Operating Assets Elway Company provided the following income statement for the last year: At the beginning of last year, Elway had 28,300,000 in operating assets. At the end of the year, Elway had 23,700,000 in operating assets. Required: 1. Compute average operating assets. 2. Compute the margin and turnover ratios for last year. (Note: Round the answer for margin ratio to two decimal places.) 3. Compute ROI. (Note: Round answer to two decimal places.) 4. CONCEPTUAL CONNECTION Briefly explain the meaning of ROI. 5. CONCEPTUAL CONNECTION Comment on why the ROI for Elway Company is relatively high (as compared to the lower ROI of a typical manufacturing company).