Return on Investment and Residual Income Johnson Company has two sources of funds: long-term debt and equity capital. Johnson Company has profit centers in the following locations with the following net incomes and total assets: Las Vegas Dallas Net Income Assets $710,000 $4,000,000 950,000 8,000,000 Tampa 1,790,000 12,000,000 a. Calculate ROI for each profit center and rank them from highest to lowest based on ROI. Round ROI to the nearest whole percentage. Las Vegas Dallas Tampa ROI Rank 0% 0% 0% ÷ b. Calculate residual income for each profit center based on a desired ROI of 5% and rank them from highest to lowest based on residual income. Las Vegas $ RI 0 Rank Dallas Tampa Check 0 0 ÷

Return on Investment and Residual Income Johnson Company has two sources of funds: long-term debt and equity capital. Johnson Company has profit centers in the following locations with the following net incomes and total assets: Las Vegas Dallas Net Income Assets $710,000 $4,000,000 950,000 8,000,000 Tampa 1,790,000 12,000,000 a. Calculate ROI for each profit center and rank them from highest to lowest based on ROI. Round ROI to the nearest whole percentage. Las Vegas Dallas Tampa ROI Rank 0% 0% 0% ÷ b. Calculate residual income for each profit center based on a desired ROI of 5% and rank them from highest to lowest based on residual income. Las Vegas $ RI 0 Rank Dallas Tampa Check 0 0 ÷

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter10: Evaluating Decentralized Operations

Section: Chapter Questions

Problem 4BE: Profit margin, investment turnover, and ROI Briggs Company has operating income of 36,000, invested...

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Return on Investment and Residual Income Johnson Company has two sources of funds: long-term debt and equity capital. Johnson Company has profit centers in the following locations with the following net incomes and total assets: Net Income Assets Las Vegas $1,260,000 $4,000,000 Dallas 1,500,000 8,000,000 Tampa 2,340,000 12,000,000 a. Calculate ROI for each profit center and rank them from highest to lowest based on ROI. Round ROI to the nearest whole percentage. ROI Las Vegas Dallas Tampa 0% 0% 0% Las Vegas $ Dallas Tampa b. Calculate residual income for each profit center based on a desired ROI of 5% and rank them from highest to lowest based on residual income. RI Rank Rank 0 0 0 ♦
Return on Investment and Residual IncomeJohnson Company has two sources of funds: long-term debt and equity capital. Johnson Company has profit centers in the following locations with the following net incomes and total assets: Net Income Assets Las Vegas $1,160,000 $4,000,000 Dallas 1,400,000 8,000,000 Tampa 2,240,000 12,000,000 a. Calculate ROI for each profit center and rank them from highest to lowest based on ROI. Round ROI to the nearest whole percentage. ROI Rank Las Vegas Answer Answer Dallas Answer Answer Tampa Answer Answer b. Calculate residual income for each profit center based on a desired ROI of 5% and rank them from highest to lowest based on residual income. ROI Rank Las Vegas Answer Answer Dallas Answer Answer Tampa Answer Answer
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