Commercial Services.com Corporation provides business-to-business services on the Internet. Data concerning the most recent year appear...

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Commercial Services.com Corporation provides business-to-business services on the Internet. Data concerning the most recent year appear below: $ 3,080,000 $ 184,800 $ 770,000 Sales Net operating income Average operating assets The following questions are to be considered independently. Exercise 10-13 Part 3 (Algo) 3. The Chief Financial Officer of the company believes a more realistic scenario would be a $1,100,000 increase in sales, requiring a $275,000 increase in average operating assets, with a resulting $107,800 increase in net operating income. What would be the company's ROI in this scenario? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Return on investment (ROI) % K A HORNS Juniper Design Limited of Manchester, England, is a company specializing in providing design services to residential developers. Last year the company had net operating income of $490,000 on sales of $1,300,000 The company's average operating assets for the year were $1,500,000 and its minimum required rate of return was 15% Required: Compute the company's residual income for the year. Residual income. Selected sales and operating data for three divisions of different structural engineering firms are given as follows: Division B $ 14,385,000 $ 7,192,500 $575,400 Division C $ 25,687,500 $ 5,137,500 $ 822,000 165 Sales Average operating assets. Net operating income 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. Reg 1 Division A $ 12,330,000 $ 3,082,500 $ 616,500 3. Assume that each division is presented with an investment opportunity that would yield a 15% 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. Division A Req 2 Req 3A Req 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 1 decimal place.) Margin ROI 14% 10% Turnover Sales Average operating assets. Net operating income Minimum required rate of return Req 1 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 15% 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 op Complete this question by entering your answers in the tabs below. Req 2 Division A $ 12,330,000 $ 3,082,500 $ 616,500 14% Req 3A Residual income (loss) Division A Division B $ 14,385,000 $ 7,192,500 $ 575,400 10% 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 B Division C $ 25,687,500 $ 5,137,500 $ 822,000 16% Division C Commercial Services.com Corporation provides business-to-business services on the Internet. Data concerning the most recent year appear below: $ 3,080,000 $ 184,800 $ 770,000 Sales Net operating income Average operating assets The following questions are to be considered independently. Exercise 10-13 Part 3 (Algo) 3. The Chief Financial Officer of the company believes a more realistic scenario would be a $1,100,000 increase in sales, requiring a $275,000 increase in average operating assets, with a resulting $107,800 increase in net operating income. What would be the company's ROI in this scenario? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Return on investment (ROI) % K A HORNS Juniper Design Limited of Manchester, England, is a company specializing in providing design services to residential developers. Last year the company had net operating income of $490,000 on sales of $1,300,000 The company's average operating assets for the year were $1,500,000 and its minimum required rate of return was 15% Required: Compute the company's residual income for the year. Residual income. Selected sales and operating data for three divisions of different structural engineering firms are given as follows: Division B $ 14,385,000 $ 7,192,500 $575,400 Division C $ 25,687,500 $ 5,137,500 $ 822,000 165 Sales Average operating assets. Net operating income 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. Reg 1 Division A $ 12,330,000 $ 3,082,500 $ 616,500 3. Assume that each division is presented with an investment opportunity that would yield a 15% 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. Division A Req 2 Req 3A Req 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 1 decimal place.) Margin ROI 14% 10% Turnover Sales Average operating assets. Net operating income Minimum required rate of return Req 1 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 15% 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 op Complete this question by entering your answers in the tabs below. Req 2 Division A $ 12,330,000 $ 3,082,500 $ 616,500 14% Req 3A Residual income (loss) Division A Division B $ 14,385,000 $ 7,192,500 $ 575,400 10% 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 B Division C $ 25,687,500 $ 5,137,500 $ 822,000 16% Division C

Answer rating: 100% (QA)

SOLUTION Residual Income Net Operating Income Average Operating Assets x Minimum Required Rate of Return Residual Income 490000 1500000 x 015 Residual Income 490000 225000 Residual Income 265000 There... View the full answer