QUESTION 15The following financial information is available for Beasties upper and lower divisions.UpperLowerRevenues$850,000$700,000Operating Expenses470,000460,000Operating Income$380,000$240,000Assets Invested$2,000,000$1,100,000What is the ROI for the Upper Division?21.8%17.9%19.0%24.1%

ROI is the rate of return calculated by dividing the operating income by assts invested in business…

Answered: The following financial information is…

Financial & Managerial Accounting

14th Edition

ISBN:9781337119207

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter23: Evaluating Decentralized Operations

Section: Chapter Questions

Problem 23.3TIF

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QUESTION 26 BMI’s East Division has a cost of capital of 20 percent. Selected financial information for the first year of business follows. Sales revenue $ 1,800,000 Income 340,000 Investment (beginning of year) 1,800,000 Current liabilities (beginning of year) 240,000 R&D expendituresa 600,000 a R&D (Research and Development) is assumed to benefit three years. All R&D is spent at the beginning of the year. East Division’s EVA (economic value added) is: A. $356,000 B. $260,000 C. $295,000 D. $108,000 E. $308,000
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Required information The Foundational 15 (Algo) [LO11-1, LO11-2] Skip to question [The following information applies to the questions displayed below.] Westerville Company reported the following results from last year’s operations: Sales $ 1,400,000 Variable expenses 510,000 Contribution margin 890,000 Fixed expenses 610,000 Net operating income $ 280,000 Average operating assets $ 875,000 At the beginning of this year, the company has a $175,000 investment opportunity with the following cost and revenue characteristics: Sales $ 280,000 Contribution margin ratio 50 % of sales Fixed expenses $ 98,000 The company’s minimum required rate of return is 15%. Foundational 11-8 (Algo) 8. If the company pursues the investment opportunity and otherwise performs the same as last year, what turnover will it earn this year? (Round your answer to 2 decimal places.)
Required information The Foundational 15 (Algo) [LO11-1, LO11-2] Skip to question [The following information applies to the questions displayed below.] Westerville Company reported the following results from last year’s operations: Sales $ 1,400,000 Variable expenses 510,000 Contribution margin 890,000 Fixed expenses 610,000 Net operating income $ 280,000 Average operating assets $ 875,000 At the beginning of this year, the company has a $175,000 investment opportunity with the following cost and revenue characteristics: Sales $ 280,000 Contribution margin ratio 50 % of sales Fixed expenses $ 98,000 The company’s minimum required rate of return is 15%. Foundational 11-7 (Algo) 7. If the company pursues the investment opportunity and otherwise performs the same as last year, what margin will it earn this year? (Round your percentage answer to 1 decimal place (i.e .1234 should be entered as 12.3))
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The following financial information is available for Beasties upper and lower divisions: Upper Lower Revenues $850,000 $700,000 Operating Expenses 470,000 460,000 Operating Income $380,000 $240,000 Assets Invested $2,000,000 $1,100,000 What is the ROI for the Upper Division? 21.8% 17.9% 19.0%