Presented here is selected information for three regional divisions of Pronghorn Comp Contribution margin Controllable margin Average operating assets Minimum rate of return (a) North Division West Division North South Division $300,800 $141,000 $940.000 12 % Divisions Compute the return on investment for each division. $501,000 $360,800 $1.640,000 West % % % 14 % South $399,600 $210,000 $1,400,000 9 %
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- Presented below is selected information for three regional divisions of Medina Company. Contribution margin Controllable margin Average operating assets Minimum rate of return. North $299,100 $140,000 $1,000,000 13 % Divisions West $500,700 $360,000 $1,500,000 15 % South $400,200 $208,600 $1,490,000 10 %(J) Selected sales and operating data for three divisions of different structural engineering firms are given as follows: Division ADivision BDivision CSales$ 12,120,000$ 28,120,000$ 20,120,000Average operating assets$ 3,030,000$ 7,030,000$ 5,030,000Net operating income$ 496,920$ 449,920$ 503,000Minimum required rate of return7.00%7.50%10.00%Required: 1. Compute the margin, turnover, and return on investment (ROI) for each division. 2. Compute the residual income (loss) for each division. 3. Assume that each division is presented with an investment opportunity that would yield a 8% rate of return. a. If performance is being measured by ROI, which division or divisions will probably accept the opportunity? b. If performance is being measured by residual income, which division or divisions will probably accept the opportunityRequired information Use the following information for the Problems below: The following data pertain to three divisions of Nevada Aggregates, Incorporated. The company's required rate o on invested capital is 8 percent. Sales revenue Income Average investment Sales margin Capital turnover ROI Residual income Sales revenue Income Average investment Sales margin Capital turnover ROI Residual income Division A ? $ 440,000 ? 40% 2 ? ? Division A $ 8,150,000 $ 1,630,000 $ 8,150,000 20 % 1.00 $ 978,000 20% Required: The following data pertain to three divisions of Nevada Aggregates, Incorporated. The company's required rate of return capital is 8 percent. Note: Round "Capital turnover" answers to 2 decimal places. $ $ $ Division B $ 10,000,000 $ 2,160,000 $ 2,600,000 $ Division B 40,300,000 8,866,000 10,075,000 22 % 4.00 88 % ? ? ? 8,060,000 Division C ? $ ? ? 45% ? 40% $ 139,000 Division C 25 % 20 % 471,000
- Selected sales and operating data for three divisions of different structural engineering firms are given as follows: Division A Division B Division C Sales 12440000$ 35550000$ 25550000$ Average operating assets 3110000$ 7110000$ 5110000$ Net operating income 547360$ 639900$ 740950$ Minimum required rate of return 10.00% 10.50% 14.50$ Required: 1.Compute the return on investment (ROI) for each division using the formula stated in terms of margin and turnover. 2.Compute the residual income for each division. 3. Assume that each division is presented with an investment opportunity that would yield a 11% rate of return. a.If performance is being measured by ROI, which division or divisions will probably accept the opportunity? Reject? b.If performance is being measured by residual income, which division or divisions will probably accept the opportunity? Reject?Question 5: Presented below is selected information for three regional divisions of Medina Company. Divisions North Wets South Contribution Margin $ 300,000 $ 500,000 $ 400,000 Controllable margin $ 150,000 $ 400,000 $ 225,000 Average operating asset $1,000,000 $ 2,000,000 $1,500,000 Minimum rate of return 13% 16% 10% Instructions Compute the return on investment for each Compute the residual income for each Assume that each division has an investment opportunity that would provide a rate of return of 19%. If ROI is used to measure performance, which division or divisions will probably make the additional investment? If residual income is used to measure performance, which division or divisions will probably…Consider the following data for three divisions of a company, X, Y, and Z: Divisional: X Y Z Sales $ 1,359,000 $ 875,000 $ 4,762,000 Operating Income 231,200 108,200 233,300 Investment in assets 591,600 764,100 2,628,100 The return on investment (ROI) for Division Y is: Multiple Choice 19.1%. 8.9%. 39.1%. 12.4%. 14.2%.
- Divisional income statements and return on investment analysis E.F. Lynch Company is a diversified investment company with three operating divisions organized as investment centers. Condensed data taken from the records of the three divisions for the year ended June 30, 20Y8, are as follows: Fee revenue Operating expenses Invested assets Required: Electronic Investment Mutual Fund Brokerage Banking Division Division Division $1,090,000 $1,130,000 $1,080,000 586,000 4,000,000 3,300,000 The management of E.F. Lynch Company is evaluating each division as a basis for planning a future expansion of operations. Line Item Description Fee revenue Operating expenses Operating income Division 1. Prepare condensed divisional income statements for the three divisions, assuming that there were no support department allocations. E.F. Lynch Company Divisional Income Statements For the Year Ended June 30, 20Y8 476,600 Mutual Fund Division Electronic Brokerage Division Feedback Check My Work 1. For…Shaq Company operates with three segments: Louisiana, Orlando, and Los Angeles.Data regarding these segments is as follows: LouisianaSegment OrlandoSegment Los AngelesSegment Contribution to indirect expenses $328,500 $207,600 $155,500 Assets directly used & identified with segment $1,858,700 $1,410,000 $742,600 1. Calculate the return on investment for each segment. Rank them from highest to lowest. Round percent to 1 decimal place. LouisianaSegment OrlandoSegment Los AngelesSegment Segment Net Income Investment base (assets) ROI (%) Rankings (1,2, or 3, where 1 is the best) 2. Assume the cost of capital is 14% for a segment. Calculate residual income for each segment. Rank them from highest to lowest. Round percent to 1 decimal place. LouisianaSegment OrlandoSegment Los AngelesSegment Segment Net Income Investment base (assets) Cost of Capital (%) Minimum Income Residual Income…Consider the following data for three divisions of a company, X, Y, and Z: Divisional: X Y Z Sales $ 1,486,000 $ 830,000 $ 4,503,000 Operating Income 208,700 126,600 286,600 Investment in assets 517,200 493,700 3,788,900 The return on sales (ROS) for Division Y is: Multiple Choice 7.6%. 14.0%. 15.3%. 25.6%. 6.4%.
- A company has the following information available for three of its divisions. COMPANY INFORMATION FOR THREE DIVISIONS Division M Investment in Assets $ 1,200,000 Division N ? Division O $ 2,500,000 Operating Income Sales Revenue ? $ 160,000 250,000 ? $ 3,200,000 ? Profit Margin Ratio 10.00% ? 6.25% Required Rate of Return 10.00% 12.50% 15.00% Return on Investment 15.00% 20.00% ? What is Division O's sales revenue? $1,666,667. $4,000,000. $2,000,000. $ 375,000.Exercise 11-14 (Algo) Evaluating New Investments Using Return on Investment (ROI) and Residual Income [LO11-1, LO11-2] Selected sales and operating data for three divisions of different structural engineering firms are given as follows: Division A Division B Division C Sales $ 12,920,000 $ 28,920,000 $ 26,150,000 Average operating assets $ 3,230,000 $ 7,230,000 $ 5,230,000 Net operating income $ 516,800 $ 462,720 $ 758,350 Minimum required rate of return 7.00% 7.50% 14.50% Required: 1. Compute the margin, turnover, and return on investment (ROI) for each division. 2. Compute the residual income (loss) for each division. 3. Assume that each division is presented with an investment opportunity that would yield a 8% rate of return. a. If performance is being measured by ROI, which division or divisions will probably accept the opportunity? b. If performance is being measured by residual income, which division or divisions will probably accept the opportunity?Selected sales and operating data for three divisions of three different companies are given below: Division A Division B Division C Sales $6,000,000 $10,000,000 $8,000,000 Average operating assets $1,500,000 $5,000,000 $2,000,000 Net operating income $300,000 $900,000 $180,000 Minimum required rate of return 15% 18% 12% Required: i. Compute the return on investment (ROI) for each division, using the formula stated in terms of margin and turnover. ii. Compute the residual income for each division. iii. Assume that each division is presented with an investment opportunity that would yield a rate of return of 17%. a. If performance is being measured by ROI, which division or divisions will probably accept the opportunity? Reject? Why? b. If performance is being measured by residual income, which division or divisions will probably accept the opportunity? Reject? Why? b. i. What does a manufacturing cycle efficiency (MCE) of less than 1 mean? How would you interpret an MCE of 0.40? ii.…