Rundle Home Maintenance Company earned operating income of $6,512,000 on operating assets of $59,200,000 during Year 2. The Tree Cutting Division earned $1,179,860 on operating assets of $6,820,000. Rundle has offered the Tree Cutting Division $2,180,000 o additional operating assets. The manager of the Tree Cutting Division believes he could use the additional assets to generate operating income amounting to $440,360. Rundle has a desired return on investment (ROI) of 9.00 percent. Required a. Calculate the return on investment for Rundle, the Tree Cutting Division, and the additional investment opportunity. b. Calculate the residual income for Rundle, the Tree Cutting Division, and the additional investment opportunity. Complete this question by entering your answers in the tabs below. Required A Required B Calculate the return on investment for Rundle, the Tree Cutting Division, and the additional investment opportunity. (Round your answers to 2 decimal places. (i.e., 0.2345 should be entered as 23.45).) Return on Investment Rundle Home Maintenance Company % Tree Cutting Division % Additional investment opportunity

Lou Barlow, a divisional manager for Sage Company, has an opportunity to manufacture and sell one of two new products for a five-year period. His annual pay raises are determined by his division’s return on investment (ROI), which has exceeded 23% each of the last three years. He has computed the cost and revenue estimates for each product as follows:     Product A Product B Initial investment:     Cost of equipment (zero salvage value) $ 390,000 $ 585,000 Annual revenues and costs:     Sales revenues $ 420,000 $ 500,000 Variable expenses $ 185,000 $ 222,000 Depreciation expense $ 78,000 $ 117,000 Fixed out-of-pocket operating costs $ 90,000 $ 70,000   The company’s discount rate is 21%.   Required: 1. Calculate the payback period for each product. 2. Calculate the net present value for each product. 3. Calculate the internal rate of return for each product. 4. Calculate the profitability index for each product. 5. Calculate the simple rate of return for each…

Lou Barlow, a divisional manager for Sage Company, has an opportunity to manufacture and sell one of two new products for a five- year period. His annual pay raises are determined by his division's return on investment (ROI), which has exceeded 19% each of the last three years. He has computed the cost and revenue estimates for each product as follows: Product A Initial investment: Cost of equipment (zero salvage value) Annual revenues and costs: Sales revenues Variable expenses Depreciation expense Fixed out-of-pocket operating costs The company's discount rate is 16%. Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor using tables. $ 180,000 $ 270,000 $ 130,000 Product B $ 44,000 $ 80,000 $ 390,000 $360,000 $ 180,000 $ 86,000 $ 60,000 Required: 1. Calculate the payback period for each product. 2. Calculate the net present value for each product. 3. Calculate the internal rate of return for each product. 4. Calculate the profitability…

The Ste. Marie Division of Pacific Media Corporation just started operations. It purchased depreciable assets costing $35 million and having a four-year expected life, after which the assets can be salvaged for $7 million. In addition, the division has $35 million in assets that are not depreciable. After four years, the division will have $35 million available from these nondepreciable assets. This means that the division has invested $70 million in assets with a salvage value of $42 million. Annual depreciation is $7 million. Annual operating cash flows are $27.5 million. In computing ROI, this division uses end-of-year asset values in the denominator. Depreciation is computed on a straight-line basis, recognizing the salvage values noted. Ignore taxes. Assume that all cash flows increase 10 percent at the end of each year. This has the following effect on the assets’ replacement cost and annual cash flows.   End of Year Replacement Cost   Annual Cash Flow 1 $ 70,000,000 × 1.1 =…

During year 1, Perez Manufacturing Company incurred $117,500,000 of research and development (R&D) costs to create a long-life battery to use in computers. In accordance with FASB standards, the entire R&D cost was recognized as an expense in year 1. Manufacturing costs (direct materials, direct labor, and overhead) are expected to be $64 per unit. Packaging, shipping, and sales commissions are expected to be $11 per unit. Perez expects to sell 2,500,000 batteries before new research renders the battery design technologically obsolete. During year 1, Perez made 434,000 batteries and sold 395,000 of them. Fill in the GAAP-based income statement for year 1. Use the sales price = 93.75 PEREZ MANUFACTURING COMPANY Income Statement Sales revenue Cost of goods sold Gross margin Depreciation expense Inventory holding expense Research & development expense Net income (loss) 0 $0 F

The Street Division of Labrosse Logistics just started operations. It purchased depreciable assets costing $40.5 million and having a four-year expected life, after which the assets can be salvaged for $8.1 million. In addition, the division has $40.5 million in assets that are not depreciable. After four years, the division will have $40.5 million available from these non depreciable assets. This means that the division has invested $81 million in assets with a salvage value of $48.6 million. Annual operating cash flows are $12.9 million. In computing ROI, this division uses beginning-of-year asset values in the denominator. Depreciation is computed on a straight-line basis, recognizing the salvage values noted. Ignore taxes. Required: a. & b. Compute ROI, using net book value and gross book value. Note: Enter your answers as a percentage rounded to 2 decimal place (i.e., 32.10). Year 1 Year 2 Year 3. Year 4 ROI Net Book Value % % % % Gross Book Value % % % %

The Street Division of Labrosse Logistics just started operations. It purchased depreciable assets costing $39.5 million and having a four-year expected life, after which the assets can be salvaged for $7.9 million. In addition, the division has $39.5 million in assets that are not depreciable. After four years, the division will have $39.5 million available from these non depreciable assets. This means that the division has invested $79 million in assets with a salvage value of $47.4 million. Annual operating cash flows are $12.7 million. In computing ROI, this division uses beginning-of-year asset values in the denominator. Depreciation is computed on a straight-line basis, recognizing the salvage values noted. Ignore taxes. Required: a. & b. Compute ROI, using net book value and gross book value. Note: Enter your answers as a percentage rounded to 2 decimal place (i.e., 32.10). Year 1 Year 2 Year 3 Year 4 Net Book Value % % % % ROI Gross Book Value % % % %

The Street Division of Labrosse Logistics Just started operations. It purchased depreciable assets costing $39.5 million and having a four-year expected life, after which the assets can be salvaged for $7.9 million. In addition, the division has $39.5 million in assets that are not depreciable. After four years, the division will have $39.5 million available from these non depreciable assets. This means that the division has invested $79 million in assets with a salvage value of $47.4 million. Annual operating cash flows are $12.7 million. In computing ROI, this division uses beginning-of-year asset values in the denominator. Depreciation is computed on a straight-line basis. recognizing the salvage values noted. Ignore taxes. Required: a. & b. Compute ROI, using net book value and gross book value. Note: Enter your answers as a percentage rounded to 2 decimal place (Le., 32.10). Year 1 Year 2 Year 3 Year 4 Net Book Value % % ROI Gross Book Value %

Please show all the steps and reasonings

A local manufacturing company estimated the following expenses for the upcoming year: a. Insurance on factory: $100,000 b. Factory security: 1 guard at $20/hour for a 2,000 hour work year . 1 production supervisor at $90,000/year d. Repair/Maintenance Technicians: 2 technicians at $40/hour each for a 2,000 hour work year e. Depreciation: $25/machine hour f. Utilities: $7/machine hour The company applies overhead on the basis of machine hours. Required: Build the cost formula Assume one unit of output takes 2 machine hours, and the estimated production for the year is 20,000 units • Calculate the expected number of machine hours to be used in the year. o Calculate the estimated total manufacturing overhead cost. o Calculate the applied overhead rate per machine hour. o Calculate the applied overhead per unit of output.