Sales Variable costs Controllable fixed costs Average operating assets 1 2 3 Top management is unhappy with the investment center's return on investment (ROG it asks the manager of the South Division to submit plans to improve ROI in the next year. The manager believes it is feasible to consider the following independent courses of action $2,950,000 (a) Compute the return 1,976,500 600,000 5.000.000 Increase sales by $300,000 with no change in the contribution margin percentage Reduce variable costs by $155.000 Reduce average operating sets by 300% Return on Investment investment (RO0 for the current year (Round ROI o decimal places, s 1.57%) IN Using the ROI equation compute the ROI under each of the proposed courses of action (Round ROI to 2 decimal places, eg 1.57%) Return on investment

Sales Variable costs Controllable fixed costs Average operating assets 1 2 3 Top management is unhappy with the investment center's return on investment (ROG it asks the manager of the South Division to submit plans to improve ROI in the next year. The manager believes it is feasible to consider the following independent courses of action $2,950,000 (a) Compute the return 1,976,500 600,000 5.000.000 Increase sales by $300,000 with no change in the contribution margin percentage Reduce variable costs by $155.000 Reduce average operating sets by 300% Return on Investment investment (RO0 for the current year (Round ROI o decimal places, s 1.57%) IN Using the ROI equation compute the ROI under each of the proposed courses of action (Round ROI to 2 decimal places, eg 1.57%) Return on investment

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Please do not give solution in image format thanku
Accounting - ROI
None
QUESTION 29 Top management is trying to determine which would be the best choice of the following investment opportunities: Data of investment choices: 3 Sales $6,000,000 Operating income 300,000 Average operating assets 3,000,000 Required: Compute the Return on investment 12% 11% 10% 8%
A2
Exercise 10-9 (Algo) Return on Investment (ROI) and Residual Income Relations [LO10-1, LO10-2] A family friend has asked your help in analyzing the operations of three anonymous companies operating in the same service sector industry. Supply the missing data in the table below: (Loss amounts should be Indicated by a minus sign. Do not round your Intermediate calculations.) Sales Net operating income Average operating assets Return on investment (ROI) Minimum required rate of return: Percentage Dollar amount Residual income Company A Company B Company C $ 450,000 $ 650,000 $ 610,000 $ 44,000 $ 166,000 24 % $ 155,000 19 % % 13 % % 10 % $ 51,000 $ 7,000
QUESTION 26 Top management is trying to determine which would be the best choice of the following investment opportunities: Data of investment choices: 1 Sales $10,000,000 Operating income 200,000 Average operating assets 2,000,000 Required: Compute the Residual Income assuming a minimum required rate of return of 8%. $40,000 $0 $50,000 $(40,000)
QUESTION 30 Management is trying to determine which would be the best choice of the following investment opportunities: Data of investment choices: 3 Sales $6,000,000 Operating income 300,000 Average operating assets 3,000,000 Required: Compute the Residual Income assuming a minimum required rate of return of 8%. $66,000 $75,000 $60,000 $70,000
Exercise 25.11 (Static) Using ROI and EVA for Performance Evaluation (LO25-2, LO25-3, LO25-4) Easton's Fabric Division has assets of $980,000, current liabilities of $130,000, and net operating income of $196,000. a. What is the Fabric Division's ROI? b. If the weighted-average cost of capital is 15 percent, what is the division's EVA? c. Which is the better technique to measure performance? Complete this question by entering your answers in the tabs below. Required A Required B Required C What is the Fabric Division's ROI? ROI RecuiccA Required B > 3 of 5
Exercise 10-9 Return on Investment (ROI) and Residual Income Relations [LO10-1, LO10-2] A family friend has asked your help in analyzing the operations of three anonymous companies operating in the same service sector industry. Supply the missing data in the table below: (Loss amounts should be indicated by a minus sign. Round your percentage answers to nearest whole percent and other amounts to whole dollars.) Company A C Sales 500,000 800,000 2$ 600,000 Net operating income 2$ 45,000 Average operating assets 2$ 162,000 145,000 Return on investment (ROI) 23 % 19 % % Minimum required rate of return: Percentage 13 % % 14 % Dollar amount $ 50,000 Residual income 7,000
1- Assume Division A offers to sell Q) 15,000 units to Division B for $74 and that Division B refuses this price. What will be the loss in potential prodits for the company whole as a whole
Please do not give solution in image format thanku