Determining Missing Items from Computations Data for the North, South, East and West divisions of Free Bird Company are as follows: Sales Income from Operations Invested Assets Return on Investment Profit Margin Investment Turnover North $860,000 (a) (b) 17.5% 7.0% (c) South (d) $51,300 (e) (f) 4.5% 3.8 East $1,020,000 (g) $680,000 15.0% (h) (i) West $1,120,000 $89,600 $560,000 (j) (k) (l) a. Determine the missing items, identifying each by the letters (a) through (l). If required, round percents and investment turnover to one decimal place. a. $ b. $ c. d. $ e. $ f. % g. $ h. % i. j. % k. % l. b. Determine the residual income for each division, assuming that the minimum acceptable rate of return established by management is 12%. Division Residual Income North Division $ South Division $ East Division $ West Division $ c. Which division is the most profitable in terms of (1) return on investment and (2) residual income? Most Profitable 1. Return on Investment 2. Residual Income
Determining Missing Items from Computations Data for the North, South, East and West divisions of Free Bird Company are as follows: Sales Income from Operations Invested Assets Return on Investment Profit Margin Investment Turnover North $860,000 (a) (b) 17.5% 7.0% (c) South (d) $51,300 (e) (f) 4.5% 3.8 East $1,020,000 (g) $680,000 15.0% (h) (i) West $1,120,000 $89,600 $560,000 (j) (k) (l) a. Determine the missing items, identifying each by the letters (a) through (l). If required, round percents and investment turnover to one decimal place. a. $ b. $ c. d. $ e. $ f. % g. $ h. % i. j. % k. % l. b. Determine the residual income for each division, assuming that the minimum acceptable rate of return established by management is 12%. Division Residual Income North Division $ South Division $ East Division $ West Division $ c. Which division is the most profitable in terms of (1) return on investment and (2) residual income? Most Profitable 1. Return on Investment 2. Residual Income
Survey of Accounting (Accounting I)
8th Edition
ISBN:9781305961883
Author:Carl Warren
Publisher:Carl Warren
Chapter15: Capital Investment Analysis
Section: Chapter Questions
Problem 15.5.1MBA
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Determining Missing Items from Computations
Data for the North, South, East and West divisions of Free Bird Company are as follows:
Sales |
Income from Operations |
Invested Assets |
Return on Investment | Profit Margin | Investment Turnover |
||||||||
North | $860,000 | (a) | (b) | 17.5% | 7.0% | (c) | |||||||
South | (d) | $51,300 | (e) | (f) | 4.5% | 3.8 | |||||||
East | $1,020,000 | (g) | $680,000 | 15.0% | (h) | (i) | |||||||
West | $1,120,000 | $89,600 | $560,000 | (j) | (k) | (l) |
a. Determine the missing items, identifying each by the letters (a) through (l). If required, round percents and investment turnover to one decimal place.
a. | $ | ||||||||||
b. | $ | ||||||||||
c. | |||||||||||
d. | $ | ||||||||||
e. | $ | ||||||||||
f. | % | ||||||||||
g. | $ | ||||||||||
h. | % | ||||||||||
i. | |||||||||||
j. | % | ||||||||||
k. | % | ||||||||||
l. |
b. Determine the residual income for each division, assuming that the minimum acceptable rate of return established by management is 12%.
Division | Residual Income |
North Division | $ |
South Division | $ |
East Division | $ |
West Division | $ |
c. Which division is the most profitable in terms of (1) return on investment and (2) residual income?
Most Profitable | |
1. Return on Investment | |
2. Residual Income |
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