Answered: XYZ Company has two divisions, A and B.…

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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Macon Mills is a division of Bolin Products. Inc. During the most recent year, Macon had a net income of $40 million. Included in the income was interest expense of $2,800,000. The companys tax rate was 40%. Total assets were $470 million, current liabilities were $104,000,000, and $72,000,000 of the current liabilities are noninterest bearing. What are the invested capital and ROI for Macon?
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% Operating Margin (ROS) 10% 20% Weighted average cost of capital 12% 12% What is the return on investment for A? 18% 40% 20% 15%…
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 operating asset turnover for A? 0.15 0.10 4.00 2.50 Group of answer choices 1 2 3 4
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…
Selected financial data for the Photocopies Division of Elizabeth's Business Machines is as follows: Sales $8,200,000 Operating income $2,788,000 Total assets $3,280,000 Current liabilities $400,000 Required rate of return 14% Weighted average cost of capital 3% What is the Photocopier Division's residual income? Question 16 options: $459,200 $2,328,800 $3,247,200 $2,689,600
Jordan Company has two divisions, which reported the following results for the most recent year. Division I Division II Income ₱ 02,700,000 ₱ 00,600,000 Average invested capital ₱ 18,000,000 ₱ 03,000,000 ROI 15% 20% Imputed interest rate = 10% What is the residual income of Division II? Group of answer choices ₱ 0 ₱ 300,000 ₱ 900,000 ₱ 294,000
Consider the following data from two divisions of a company, P and Q: Divisional P Q Sales $ 2,000,000 $ 1,100,000 Operating Income $ 800,000 $ 660,000 Investment $ 3,200,000 $ 1,760,000 If the minimum rate of return is 9%, what is Division P's residual income (RI)?
The following information is available about the status and operations of Big Shot Corp., which has a required ROI of 15% and discount rate of 12%: Division A Division B Divisional Investment P 500,000 P 1,250,000 Divisional Profit P 350,000 P 625,000 Variable Cost P 500,000 P 3,500,000 Divisional Sales P1, 500,000 P 5,500,000 Division A could increase its sales by P 300,000 by increasing its investment by P300,000. Compute its ROI. Division A could increase its sales by P150,000 by increasing its investment by P400,000. Compute its total residual income. Division B could reduce its investment so that its asset turnover increased by 2, while holding total sales constant. Compute its residual income.
Assume that a division of MN Company has a 10% return on sales, income of $10,000, and an investment turnover of 4 times, divisional investment is 1. $10,000 2. $25,000 3. $40,000 4. $100,000
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
Alexander Inc. makes basketballs. The results for the year were as follows: Basketballs Sales $450,000 Income $72,000 Asset base $300,000 Weighted average cost of capital 15% Required:Compute the following amounts for the company:SHOW ALL CALCULATIONS. ROUND EACH NUMBER TO TWO (2) DECIMAL PLACES. A. Return on investment (ROI). B. Residual income if the desired rate of return is 20%. C. EVA. D. Turnover. E. Margin.

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