Managerial Accounting
17th Edition
ISBN: 9781260247787
Author: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer
Publisher: RENT MCG
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Question
Chapter 11, Problem 5E
To determine
Concept introduction:
The Return on Investment is also called ROI. The return means the profit you make as a result of your investments. Return on Investment is a performance measure used to evaluate the profitability or efficiency of an investments or compare the efficiency of a number of investments. ROI is generally defined as the ratio of net profit over the total cost of the investment. ROI is calculated by dividing the net income by the total cost of the investment.
The missing data from the table for a distributor of martial arts products
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Ex. 11-9
Exercise 11-9 (Static) Return on Investment (ROI) and Residual Income Relations [LO11-1, LO11-2]
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.)
Sales
Net operating income
Average operating assets
Return on investment (ROI)
Minimum required rate of return:
Percentage
Dollar amount
Residual income
$ 9,000,000
$ 3,000,000
18 %
16 %
$
$
$
Company
B
7,000,000
280,000
14 %
320,000
%
Saved
C
$ 4,500,000
$ 1,800,000
$
%
15 %
90,000
Exercise 11-5 (Algo) Return on Investment (ROI) [LO11-1]
Provide the missing data in the following table for a distributor of martial arts products:
Note: Enter "Turnover" and "ROI" answers to 1 decimal place.
Sales
Net operating income
Average operating assets
Margin
Turnover
Return on investment (ROI)
Alpha
$ 366,000
4.0
%
Division
Bravo
$ 266,000
31,920
$
%
24.0 %
$
Charlie
46,895
11 %
16.5 %
Exercise 11-5 (Algo) Return on Investment (ROI) [LO11-1]
Provide the missing data in the following table for a distributor of martial arts products: (Enter "Turnover" and "ROI" answers to 1
decimal place.)
Sales
Net operating income
Average operating assets
Margin
Turnover
Return on investment (ROI)
> Answer is complete but not entirely correct.
Division
Bravo
$
Alpha
1,496,000
$ 119,680
$ 374,000
8
4.0
32.0
%
%
$ 260,000
$ 41,600
$
1,300 X
16
200.0 X
32.0
%
%
Charlie
$ 650,000 X
$ 46,800
$ 433,333 X
15
1.5
22.5
%
%
Chapter 11 Solutions
Managerial Accounting
Ch. 11 - Prob. 1QCh. 11 - Prob. 2QCh. 11 - Prob. 3QCh. 11 - Prob. 4QCh. 11 - Prob. 5QCh. 11 - Prob. 6QCh. 11 - Prob. 7QCh. 11 - Prob. 8QCh. 11 - Prob. 9QCh. 11 - Prob. 10Q
Ch. 11 - Prob. 1AECh. 11 - Prob. 2AECh. 11 - Prob. 1F15Ch. 11 - Prob. 2F15Ch. 11 - Prob. 3F15Ch. 11 - Prob. 4F15Ch. 11 - Prob. 5F15Ch. 11 - Prob. 6F15Ch. 11 - Prob. 7F15Ch. 11 - Prob. 8F15Ch. 11 - Prob. 9F15Ch. 11 - Prob. 10F15Ch. 11 - Prob. 11F15Ch. 11 - (
$1,000,000
300,000
700,000
500.000
$
200,000
...Ch. 11 - Prob. 13F15Ch. 11 - Prob. 14F15Ch. 11 - Prob. 15F15Ch. 11 - Prob. 1ECh. 11 - Prob. 2ECh. 11 - Prob. 3ECh. 11 - Prob. 4ECh. 11 - Prob. 5ECh. 11 - Prob. 6ECh. 11 - Prob. 7ECh. 11 - Prob. 8ECh. 11 -
EXERCISE 11-9 Return on Investment (ROI) and...Ch. 11 - Prob. 10ECh. 11 - Prob. 11ECh. 11 - Prob. 12ECh. 11 - Prob. 13ECh. 11 - Prob. 14ECh. 11 - Prob. 15ECh. 11 - Prob. 16ECh. 11 - Prob. 17PCh. 11 - Prob. 18PCh. 11 - Prob. 19PCh. 11 - Prob. 20PCh. 11 - Prob. 21PCh. 11 - Prob. 22PCh. 11 - Prob. 23PCh. 11 - Prob. 24PCh. 11 - Prob. 25PCh. 11 - Prob. 26C
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- Question 3: Sohar Company's financial information is given in the table below. Year Sales (OMR) Fixed Costs Variable Costs 2019 405000 90000 225000 2020 450000 120000 240000 Calculate: a) PV ratio, ь) В.Е.Р. c) Sales required to earn a profit of OMR 40000. d) Margin of safety at a profit of OMR 50000 Profit when sales are OMR. 200000. e)arrow_forwardexplain your solution Operating margin Market Ratio Operating income Current Ratio = Ravenue 6957873 73686228 = 0.094 Grooss profit cost of goods solds = 0.561 26505347 47180881 Current Assets Current liabilities 72595989 53459728 = 135795657arrow_forwardExercise 10-9 (Static) 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.) Sales Net operating income Average operating assets Return on investment (ROI) Minimum required rate of return: Percentage Dollar amount Residual income Company A $ 9,000,000 $ 3,000,000 18 % 16 % Company B $ 7,000,000 $ 280,000 $ 14 % 320,000 % $ Company C 4,500,000 $ 1,800,000 $ % 15 % 90,000arrow_forward
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