Question: Universal Electronics, Inc. (UEI), which started operations one year ago,has two divisions: Consumer and Commercial. Both divisions invest heavily in R&D, which is assumed to

Universal Electronics, Inc. (UEI), which started operations one year ago,has two divisions: Consumer and Commercial. Both divisions invest heavily in R&D, which is assumed to generate benefits for five years. R&D spending is made uniformly throughout the year. UEI has a cost of capital of 11 percent. Selected financial information for the two divisions (in thousands of dollars) for the year just completed follows.

Commercial Consumer Sales revenue $22,000 $37,000 Divisional income Divisional investment 3,850 3,885

27,500 27,750 Current liabilities 1,000 800 R&D 1,000 1,000

RequiredEvaluate the performance of the two divisions assuming UEI uses return on investment (ROI).

Commercial Consumer Sales revenue $22,000 $37,000 Divisional income Divisional investment 3,850 3,885 27,500 27,750 Current liabilities 1,000 800 R&D 1,000 1,000

Step by Step Solution

★★★★★

3.27 Rating (179 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

Consumer Commercial Inco... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Fundamentals Cost Accounting Questions!

Martin Buber Co. purchased land as a factory site for $400,000. The process of tearing down two old buildings on the site and constructing the factory required 6 months. The company paid $42,000 to...

A condensed income statement for the Electronics Division of Gihbli Industries Inc. for the year ended December 31, 2014, is as follows: Sales .............. $ 1,575,000 Cost of goods sold .............

Electronics Assembly Inc. is a contract manufacturer that assembles consumer electronics for a number of companies. Currently, the operations manager is assessing the capacity requirements as input...

In each independent situation below, identify and describe at least three risks. For each risk, suggest two internal controls to address it. a. (CMA adapted, June 1992) Midwest Electronics Corp....

7 Universal Electronics, Inc. (UEI), which started operations one year ago, has two divisions: Consumer and Commercial. Both divisions invest heavily in R&D, which is assumed to benefit five years....

Exercise 14-33 (Static) Comparing Business Units Using Economic Value Added (EVA) (LO 14-4) Universal Electronics, Inc. (UEI), which started operations one year ago, has two divisions: Consumer and...

Incorrect answers are also included. Thanks Universal Electronics, Inc. (UEI), which started operations one year ago, has two divisions: Consumer and Commercial. Both divisions invest heavily in R&D,...

Exercise 14-32 (Algo) Comparing Business Units Using Residual Income (LO 14-3) Universal Electronics, Inc. (UEI), which started operations one year ago, has two divisions: Consumer and Commercial....

Exercise 14-31 (Static) Comparing Business Units Using ROI (LO 14-2) Universal Electronics, Inc. (UEI), which started operations one year ago, has two divisions: Consumer and Commercial. Both...

Which of the following is not one of the standard deductions on the tax planning statement? Deductible medical and dental expenses. Deductible taxes. Deductible interest.. Deductible deposits All of...

Mr. Khalil went to Pre-Owned Motor Corp to purchase a Jaguar for $120,000. He put 3% down and the interested rate is 5.00% for 5 years. What was the total principal paid at the end of year 3. Show...

35. LO.5 Gray, Inc., a private foundation, reports the following items of income and deductions. Interest income $ 29,000 Rent income 61,000 Dividend income 15,000 Royalty income 22,000 Unrelated...

1. Describe the lifestyle of the typical Harley owner. How involved are Harley owners with their bikes and with the Harley image?

The business school dean has asked the accounting club to help with a product costing analysis for the school. How would we define the products? What questions would we ask the dean before we accept...

What criteria are important in determining the choice of an allocation base?

Ricky Ripovs Pawn Shop charges an interest rate of 15.75 percent per month on loans to its customers. Like all lenders, Ricky must report an APR to consumers. Requirement 1: What rate should the shop...

Lights Incorporated calculates cost for an equivalent unit of production using the weighted-average method. Data for July: Work-in-process inventory, July 1 (37,500 units): Direct materials (97%...

When a scientist conducted a genetics experiment withpeas, one sample of offspring consisted of 911 peas, with 708 of them having red flowers. If we assume, as the scientist did, that under...