The following data relates to the XYZ Corporation and its X Division. X Division sales P 8,000,000X Division operating income P 480,000X Division total assets P 2,000,000X Division current liabilities P 600,000Corporate target rate of return14%Corporate weighted average cost of capital10%Corporate effective tax rate30% What is the X Divisions Economic Value Added (EVA)?

Economic Value Added (EVA) The Calculation of Economic Value Added which can be formulized by Net…

Answered: The following data relates to the XYZ…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter12: Balanced Scorecard And Other Performance Measures

Section: Chapter Questions

Problem 3PA: Macon Mills is a division of Bolin Products. Inc. During the most recent year, Macon had a net...

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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%
Use the following information for Exercises 11-31 and 11-32: Washington Company has two divisions: the Adams Division and the Jefferson Division. The following information pertains to last years results: Washingtons actual cost of capital was 12%. Exercise 11-31 Economic Value Added Refer to the information for Washington Company above. Required: 1. Calculate the EVA for the Adams Division. 2. Calculate the EVA for the Jefferson Division. 3. CONCEPTUAL CONNECTION Is each division creating or destroying wealth? 4. CONCEPTUAL CONNECTION Describe generally the types of actions that Washingtons management team could take to increase Jefferson Divisions EVA?
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 data relates to the ABC Corporation and its A Division. A Division sales P 8,000,000 A Division operating income P 480,000 A Division total assets P 2,000,000 A Division current liabilities P 600,000 Corporate target rate of return 14% Corporate weighted average cost of capital 10% Corporate effective tax rate 30% What is the A Divisions Economic Value Added (EVA)?
Data for the wholesale products division of ABC Co. are as follows: Earnings before interest and taxes P30,000,000; Depreciation expense P10,000,000; Interest Expense P1,000,000; Change in net working capital P5,000,000; Capital expenditures P4,000,000; Invested capital P50,000,000; Weighted average cost of capital 10%; Tax rate 30%. Considering the impact of income tax, the economic value added by the division must be nearest to P15,300,000 P16,000,000 P16,300,000 P25,000,000 P30,000,000
XYZ Company has two divisions, A and B. Information for each division is as follows: A B Net earnings for division P 40,000 P 260,000 Asset base for division P100,000 P1,200,000 Target rate of return 15% 18% Margin 10% 20% Weighted average cost of capital 12% 12% What is the total sales amount for B? P666,667 P800,000 P1,300,000 P1,200,000 Group of answer choices 1 2 3 4
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…
The Global Products Corporation has three subsidiaries: Medical Supplies Heavy Machinery Electronics Sales.......... $20,040,000 $5,980,000 $4,730,000 Net income 1,700,000 592,000 402,000 (after taxes) Assets............8,340,000 8,760,000 3,570,000 a. Which division has the lowest return on sales? b. Which division has the highest return on assets? c. Compute the return on assets for the entire corporation. d. If the $8,760,000 investment in the heavy machinery division is sold off and redeployed in the medical supplies subsidiary at the same rate of return on assets currently achieved in the medical supplies division, what will be the new return on assets for the entire corporation?
The Global Products Corporation has three subsidiaries. Medical Supplies Heavy Machinery Electronics Sales $20,040,000 $5,980,000 $4,730,000 Net Income (after taxes) 1,700,000 592,000 402,000 Assets 8,340,000 8,760,000 3,570,000 Which division has the lowest return on sales? Which division has the highest return on assets? Compute the return on assets for the entire corporation? If the $8,760,000 investment in the heavy machinery division is sold off and redeployed in the medical supplies subsidiary at the same rate of return on assets currently achieved in the medical supplies division, what will be the new return on assets for the entire corporation?
Spartans Inc. has three operating divisions: Alpha, Beta, and Gamma. Financial information for each division in displayed below.                                Alpha                 Beta                    Gamma Sales                   $525,000             $625,000               $475,000 Oper. Exp.          $465,000                   ?                     $437,000 Oper. Income       $60,000               $75,000                       ?       Inv. Assets                  ?                          ?                       $380,000 ROI                         0.2000                 0.1500                         ?       Sales Margin               ?                              ?                         0.0800 Cap. Turn                   ?                        1.25                      ?       Use the DuPont Equation to calculate the following values: Return on Investment =    Net Operating Income                       Avg. Invested Assets…
Spartans Inc. has three operating divisions: Alpha, Beta, and Gamma. Financial information for each division in displayed below.                                Alpha                 Beta                    Gamma Sales                   $525,000             $625,000               $475,000 Oper. Exp.          $465,000                   ?                     $437,000 Oper. Income       $60,000               $75,000                       ?       Inv. Assets                  ?                          ?                       $380,000 ROI                         0.2000                 0.1500                         ?       Sales Margin               ?                              ?                         0.0800 Cap. Turn                   ?                        1.25                      ?       Use the DuPont Equation to calculate the following values: Return on Investment =    Net Operating Income                       Avg. Invested Assets…
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

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X Division sales	P 8,000,000
X Division operating income	P 480,000
X Division total assets	P 2,000,000
X Division current liabilities	P 600,000
Corporate target rate of return	14%
Corporate weighted average cost of capital	10%
Corporate effective tax rate	30%