Selected sales and operating data for three divisions of different structural engineering firms are given as...
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Selected sales and operating data for three divisions of different structural engineering firms are given as follows: Divi Sales Average operating assets. Net operating income Division A $ 6,500,000 $ 1,300,000 364,000 21.00% Division 8 $ 10,500,000 $ 9,600,000 $₁ 5,250,000 $ 1,920,000 $ 1,008,000 $ 273,600 19.20% 18.00% $ Minimum required rate of return. 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 (loss) for each division. 3. Assume that each division is presented with an investment opportunity that would yield a 20% rate of return. a. If performance is being measured by ROI, which division or divisions will probably accept or reject the opportunity? b. If performance is being measured by residual income, which division or divisions will probably accept or reject the opportunity? Complete this question by entering your answers in the tabs below. Reg 1 Req 2 Reg 3A Reg 38 Compute the return on investment (ROI) for each division using the formula stated in terms of margin and turnover. (Do not round Intermediate calculations. Round your answers to 2 decimal places.) Margin Turnover ROI Division A % % Division B % Division C % 26 Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3A Req 3B Compute the residual income (loss) for each division. (Do not round intermediate calculations. Loss amounts should be indicated by a minus sign.) Division A Division B Division C Residual income (loss) < Req 1 Req 3A > Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3A Req 38 Assume that each division is presented with an investment opportunity that would yield a 20% rate of return. If performance is being measured by ROI, which division or divisions will probably accept or reject the opportunity? Division A Division B Division C < Req 2 Req 3B > Complete this question by entering your answers in the tabs below. Req 1 Reg 2 Reg 3A Reg 38 Assume that each division is presented with an investment opportunity that would yield a 20% rate of return. If performance is being measured by residual income, which division or divisions will probably accept or reject the opportunity? Division A Division B Division C < Req 3A Selected sales and operating data for three divisions of different structural engineering firms are given as follows: Divi Sales Average operating assets. Net operating income Division A $ 6,500,000 $ 1,300,000 364,000 21.00% Division 8 $ 10,500,000 $ 9,600,000 $₁ 5,250,000 $ 1,920,000 $ 1,008,000 $ 273,600 19.20% 18.00% $ Minimum required rate of return. 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 (loss) for each division. 3. Assume that each division is presented with an investment opportunity that would yield a 20% rate of return. a. If performance is being measured by ROI, which division or divisions will probably accept or reject the opportunity? b. If performance is being measured by residual income, which division or divisions will probably accept or reject the opportunity? Complete this question by entering your answers in the tabs below. Reg 1 Req 2 Reg 3A Reg 38 Compute the return on investment (ROI) for each division using the formula stated in terms of margin and turnover. (Do not round Intermediate calculations. Round your answers to 2 decimal places.) Margin Turnover ROI Division A % % Division B % Division C % 26 Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3A Req 3B Compute the residual income (loss) for each division. (Do not round intermediate calculations. Loss amounts should be indicated by a minus sign.) Division A Division B Division C Residual income (loss) < Req 1 Req 3A > Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3A Req 38 Assume that each division is presented with an investment opportunity that would yield a 20% rate of return. If performance is being measured by ROI, which division or divisions will probably accept or reject the opportunity? Division A Division B Division C < Req 2 Req 3B > Complete this question by entering your answers in the tabs below. Req 1 Reg 2 Reg 3A Reg 38 Assume that each division is presented with an investment opportunity that would yield a 20% rate of return. If performance is being measured by residual income, which division or divisions will probably accept or reject the opportunity? Division A Division B Division C < Req 3A
Expert Answer:
Answer rating: 100% (QA)
1 Calculate ROI A B C Margin 3640006500000 56 100800010500000 96 2736009600000 285 Turnover 650... View the full answer
Related Book For
Managerial Accounting
ISBN: 978-0697789938
13th Edition
Authors: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer
Posted Date:
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