Tina Patel, the manager of the Food and Lodging Division at Winter Wonderland, has hired you as a consultant to help her examine her division’s performance under several different circumstances.

1. Type the data that follow into an Excel spreadsheet to compute the division’s actual return on investment and residual income. (Data are from parts 3 and 4 of this chapter’s Review Problem.) Match your data entries to the rows and columns shown below. (When entering a formula, begin with “= SUM,” and enclose the formula in parentheses. The spreadsheet will then know to compute the answer. Remember to format each cell for the type of numbers it holds, such as percentage, currency, or general.)

2. Patel would like to know how the figures would change if Food and Lodging had a desired ROI of 40 percent and average assets invested of $10,000,000. Revise your spreadsheet from requirement 1 to compute the division’s return on investment and residual income under those conditions.
3. Patel also wants to know how the figures would change if Food and Lodging had a desired ROI of 30 percent and average assets invested of $12,000,000. Revise your spreadsheet from requirement 1 to compute the division’s return on investment and residual income under those conditions.
4. Does the use of formatted spreadsheets simplify the computation of ROI and residual income? Do such spreadsheets make it easier to perform “what-if”analyses?

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Investment Center Food and Lodging Division Actual Results $40,000,000 6,450,000 $10,000,000 Sales s Operating income s Average assets invested Desired RD Retum on Investment Profit Margin Asset TU mover Residual Income SUMDSD6) SUMD5D4) SUM D4/D5)