The United World Corporation has three subsidiaries. Computers Magazines Cable TV Sales $20,750,000 $5,220,000 $4,160,000 Net income
Question:
The United World Corporation has three subsidiaries.
| Computers | Magazines | Cable TV | ||||
| Sales | $20,750,000 | $5,220,000 | $4,160,000 | |||
| Net income (after taxes) | 1,280,000 | 219,000 | 341,000 | |||
| Assets | 15,110,000 | 8,510,000 | 3,430,000 | |||
a-1. Compute the return on sales. (Do not round intermediate calculations. Round the final answers to 2 decimal places.)
| Return on sales | |
| Computers | % |
| Magazines | % |
| Cable TV | % |
a-2. Which division has the lowest return on sales?
b-1. Compute the ROA. (Round the final answers to 2 decimal places.)
| Return on assets | |
| Computers | % |
| Magazines | % |
| Cable TV | % |
b-2. Which division has the highest ROA?
c. Compute the ROA for the entire corporation. (Do not round intermediate calculations. Round the final answer to 2 decimal places.)
d. If the $3,430,000 investment in the cable TV division is sold and redeployed in the computer subsidiary at the same rate of ROA currently achieved in the computer division, what will be the new ROA for the entire corporation? (Round the final answer to 2 decimal places.)
Expert Answer:
SOLUTION To answer your question lets calculate the requested values step by step a1 Compute the return on sales Return on Sales Net Income Sales 100 ... View the full answer
Financial Reporting And Analysis
ISBN: 9781260247848
8th Edition
Authors: Lawrence Revsine, Daniel Collins, Bruce Johnson, Fred Mittelstaedt, Leonard Soffer
