The following are selected data for the division for the consumer products of ABC Corp for 2019:Sales50,000,000Average invested capital (assets)20,000,000Net income2,000,000Cost of capital8%What is the amount of residual income for the division?P 400,000P 1,000,000P 1,600,000P 2,000,000Group of answer choices1234

SOLUTION RESIDUAL INCOME FOR DIVISION = NET INCOME - AVERAGE INVESTED CAPITAL * COST OF CAPITAL .

Answered: The following are selected data for the…

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter14: Decentralized Operations

Section: Chapter Questions

Problem 3SEQ: Division A of Kern Co. has sales of $350,000, cost of goods sold of $200,000, operating expenses of...

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Division A of Kern Co. has sales of $350,000, cost of goods sold of $200,000, operating expenses of $30,000, and invested assets of $600000. What is the return on investment for Division A? A. 20% B. 25% C. 33% D. 40%
The income statement comparison for Rush Delivery Company shows the income statement for the current and prior year. A. Determine the operating income (loss) (dollars) for each year. B. Determine the operating income (percentage) for each year. C. The company made a strategic decision to invest in additional assets in the current year. These amounts are provided. Using the total assets amounts as the investment base, calculate the ROI. Was the decision to invest additional assets in the company successful? Explain. D. Assuming an 8% cost of capital, calculate the RI for each year. Explain how this compares to your findings in part C.
The following are selected data for the division for the consumer products of ABC Corp for 2019: Sales 50,000,000 Average invested capital (assets) 20,000,000 Net income 2,000,000 Cost of capital 8% What is the asset turn-over ratio for the division? 0.25 2.5 8 10% Group of answer choices 1 2 3 4
The following are selected data for the division for the consumer products of ABC Corp for 2019: Sales 50,000,000 Average invested capital (assets) 20,000,000 Net income 2,000,000 Cost of capital 8% What is the return on sales for the division? 4% 8% 10% 20% Group of answer choices 1 2 3 4
The following are selected data for the division for the consumer products of ABC Corp for 2019: Sales 50,000,000 Average invested capital (assets) 20,000,000 Net income 2,000,000 Cost of capital 8% What is the return on investment for the division? 2% 4% 8% 10% Group of answer choices 1 2 3 4
The following are selected data for the division for the consumer products of ABC Corp for 2020: Sales P 10,000,000 Average invested capital 4,000,000 Net Income 400,000 Cost of Capital 8% What is the amount of residual income for the division? P 80,000 P 200,000 P 320,000 P 400,000 Group of answer choices 1 2 3 4
The following are selected data for the division for the consumer products of ABC Corp for 2020: Sales                                          P 10,000,000             Average invested capital                4,000,000             Net Income                                       400,000             Cost of Capital                                        8% What is the asset turn-over ratio for the division? .25 times 2.5 times 8 times 10% Group of answer choices 1 2 3 4
The following are selected data for the division for the consumer products of ABC Corp for 2019: Sales                                                        50,000,000 Average invested capital (assets)       20,000,000 Net income                                               2,000,000 Cost of capital                                               8% What is the interest rate spread for the division? (Hint: the spread is equal to the ROI less the cost of capital.) 2% 8% 10% 20% Group of answer choices 1 2 3 4
The following are selected data for the division for the consumer products of ABC Corp for 2020: Sales P 10,000,000       Average invested capital                4,000,000       Net Income                                       400,000       Cost of Capital                                        8% What is the return on investment for the division? 2% 4% 8% 10% Group of answer choices 1 2 3 4
The following are selected data for the division for the consumer products of ABC Corp for 2020: Sales P 10,000,000 Average invested capital 4,000,000 Net Income 400,000 Cost of Capital 8% What is the return on sales for the division? 4% 8% 10% 20% Group of answer choices 1 2 3 4
The following data are taken from the records of Dove Company, a division of Oasis Corporation for the year ended December 31, 2021 Sales 120,000,000.00Less: Variable Cost and Expenses 8,000,000.00Contribution Margin 4,000,000.00Less:: Direct Fixed Cost and Expenses 1,000,000.00Segment Income 3,000,000.00 The company used an average assets of P8,000,000.00 in 2021. The cost of capital is 12% Calculate the following:1. Return on Sales2. Asset Turnover3. ROI4. Residual Income
Spartans Inc. has the following information for its two divisions: North and South North South Sales $6,000,000 $6,000,000 Expenses $3,800,000 $3,800,000 Oper. Income $2,200,000 $2,200,000 Taxes $660,000 $770,000 Taxable Inc. $1,540,000 $1,430,000 Invested Assets $13,000,000 $15,000,000 Spartans Inc. has a 10% hurdle rate. Calculate the following for each division: Return on Investment (ROI) North Division ________________ South…

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Sales	50,000,000
Average invested capital (assets)	20,000,000
Net income	2,000,000
Cost of capital	8%