LA Fitness is a regional chain of health clubs. The manager of the clubs, who have the authority to make investments as needed are evaluated based on ROI. The company's NW DC club reported the follwoing results for the past year: Sales Variable expenses Contribution margin Fixed expenses Net operating income Average operating assets $12,500,000 2,380,000 3,220,000 2,716,000 $504,000 $7,000,000 At the beginning of this year, the manager has a $700,000 investment opportunity with the following characteristics: Sales Contribution margin ratio Fixed expenses $660,000 50% of sales $246,400 (Show your work) 1. What was last year's return on investment (ROI) for the club? (Round to the nearest 0.1%.) 2. What is the ROI for the new investment opportunity by itself? 3. If the club pursues the investment opportunity and otherwise performs the same as last year, what will be the overall ROI be this year? (Round to the nearest 0.1%.)

Fashion Forward, Inc. is decentralized into two divisions which are investment centers: Men’s Wear and Women’s Wear.  For the past year, the Women’s Wear division had the following ratios: Return on Investment                   27% Profit Margin                                     15% Investment Turnover                     1.8 The following data relates to the Men’s Wear division for the past year. Sales                                                      $18,000,000 Cost of goods sold                           $12,000,000 Operating expenses                       $4,200,000 Invested assets                              $10,000,000   Question: Prepare a divisional income statement for the Men’s Wear division for the past year and Calculate the Return on Investment (ROI) for the Men’s Wear division for the past year (show work)

The Basketball Division of Sparrow Sports Enterprises reported the following financial data for the year: Assets available for use $1,200,000 Book Value $1,500,000 Market Value Residual income $108,000 Return on investment 14% Refer to Sparrow Sports Enterprises. If the manager of the Basketball Division is evaluated based on return on investment, how much would she be willing to pay for an investment that promises to increase net segment income by $60,000? Select one: a. $1,200,000 b. $108,000 c. $300,000 d. $428,572

Lasky Manufacturing has two divisions: Carolinas and Northeast. Lasky has a cost of capital of 7.5 percent. Selected financial information (in thousands of dollars) for the first year of business follows: Sales revenue Income Divisional assets (beginning of year) Current liabilities (beginning of year) R&D expendituresa aR&D is assumed to benefit two periods. All R&D is spent at the beginning of the year. Required: a-1. Evaluate the performance of the two divisions assuming Lasky uses return on investment (ROI). a-2. Which division had the better performance? Req A1 Complete this question by entering your answers in the tabs below. Divisions Carolinas $ 2,100 170 1,000 290 1,050 Req A2 Carolinas Northeast Northeast $ 6,600 372 1,500 290 970 Evaluate the performance of the two divisions assuming Lasky uses return on investment (ROI). Note: Enter your answers as a percentage rounded to 1 decimal place (i.e., 32.1). ROI % %

Required information Use the following information for the Exercises below. [The following information applies to the questions displayed below.] Megamart, a retailer of consumer goods, provides the following information on two of its departments (each considered an investment center). Average Invested Assets Sales Income Electronics $63,460,000 $3,173,000 $16,700,000 Sporting goods 19,050,000 2,286,000 12,700,000 Investment Center Exercise 22-10 Computing return on investment and residual income; investing decision LO A1 1. Compute return on investment for each department. Using return on investment, which department is most efficient at using assets to generate returns for the company? 2. Assume a target income level of 12% of average invested assets. Compute residual income for each department. Which department generated the most residual income for the company? 3. Assume the Electronics department is presented with a new investment opportunity that will yield a 14% return on…

2. Using the DuPont formula, determine the profit margin, investment turnover, and return on investment for each division. (Round to 2nd decimal places). 3. If management desires a minimum acceptable rate of return of 8%, determine the residual income for each division. 4. Discuss the evaluation of the two divisions, using the performance measures determined in parts (1), (2), and (3).

ndi Systems Inc., headquartered in Bengaluru, India, provides specialized information technology (IT) services and consists of three divisions: (1) insurance, (2) retail and (3) hospitality. For 2023, it recorded the following data:     Insurance Retail Hospitality Total Sales revenues $ 4,017,000   $ 5,824,000   $ 1,944,000   $ 11,785,000 Variable costs (% of sales)   30 %   41 %   44 %     Traceable fixed costs   2,121,000     2,852,000     724,500     5,697,500 Common fixed costs                     1,200,000     Required: 1. Prepare a segment performance report showing the segment margin in dollars and percentages for all three divisions. Use Exhibit 12–3 as a guide. (Round "Percentage" answers to 2 decimal places.)       2. Which segment is most profitable?   multiple choice Insurance Retail Hospitality

HomeLife Life Insurance Company has two service departments (actuarial and premium rating) and two production departments (advertising and sales). The distribution of each service department's efforts in percentages) to the other departments is shown in the following table: From Actuarial Premium Actuarial 20% To Actuarial $80,000 Premium 15,000 rating Advertising 60,000 Sales 40,000 Premium Rating Advertising Sales 808 108 10% 20 60 The direct operating costs of the departments (including both variable and fixed costs) are: Required: 1. Determine the total costs of the advertising and sales departments after using the direct method or allocation. 2. Determine the total costs of the advertising and sales departments after using the step method of allocation. 3. Determine the total costs of the advertising and sales departments after using the reciprocal method of allocation.

Megamart, a retailer of consumer goods, provides the following information on two of its departments (each considered an investment center).  Investment Center Sales   Income   AverageInvested Assets Electronics $ 40,000,000   $ 2,880,000   $ 16,000,000   Sporting goods   20,000,000     2,040,000     12,000,000       Exercise 22-10 Computing return on investment and residual income; investing decision LO A1 1. Compute return on investment for each department. Using return on investment, which department is most efficient at using assets to generate returns for the company?2. Assume a target income level of 12% of average invested assets. Compute residual income for each department. Which department generated the most residual income for the company?3. Assume the Electronics department is presented with a new investment opportunity that will yield a 15% return on investment. Should the new investment opportunity be accepted?

The vice president of operations of Scott Hall and Associates is evaluating the performance of two divisions organized as investment centers. Invested assets and condensed income statement data for the past year for each division are as follows: Category Sales Cost of goods sold Operating expenses Invested assets C. Road Bike Division $1,750,000 1,300,000 202,000 1,400,000 Mountain Bike Division $1,810,000 1,440,000 236,800 800,000 Instructions a. Prepare condensed divisional income statements for the year ended December 31, 2021, assuming that there were no service department charges. b. Using the DuPont formula for return on investment, determine the profit margin percentage, investment turnover, and return on investment for each division. (Round percentages and the investment turnover to two places behind the decimal.) If management's minimum acceptable return on investment is 10%, determine the residual income for each division. d. In your own words evaluate the performance of the…