Required information[The following information applies to the questions displayed below.]Westerville Company reported the following results from last year's operaSalesVariable expensesContribution marginFixed expenses$ 1,600,000700,000900,000660,000Net operating income240,000Average operating assets$ 1,000,000At the beginning of this year, the company has a $325,000 investment opporcharacteristics:$ 520,000SalesContribution margin ratioFixed expenses70 % of sales$ 312,000The company's minimum required rate of return is 15%.3. What is last year's return on investment (ROI)?ROI

Return on investment indicates the percentage of earning the business is gaining from the…

Answered: Required information [The following…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter9: Responsibility Accounting And Decentralization

Section: Chapter Questions

Problem 3PA: The income statement comparison for Forklift Material Handling shows the income statement for the...

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An investment center of Stuart Corporation shows an operating income of $8,250 on total operating assets of $66,000. Required Compute the return on investment. (Round your answer to 2 decimal places. (i.e., 0.2345 should be entered as 23.45).) Return on investment %
The business units of contractor companies carry out investment expenditures for a capital of 80,015,000 the investment is expected to be generate a cash flow of 6,015,000 per year for 8 years, costs capital (cost of money) of 5% per year and an assumed interest rate of 10%. Pelase Count : a. Payback Period of Investment b. NPV c. Profitability Index d. IRR
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 income statement comparison for Forklift Material Handling 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 return on investment. Was the decision to invest additional assets in the company successful? Explain. D. Assuming an 8% cost of capital, calculate the residual income for each year. Explain how this compares to your findings in part C.
During the current year, Sokowski Manufacturing earned income of $350,000 from total sales of $5,500,000 and average capital assets of $12,000,000. A. Based on this information, calculate asset turnover. B. Using the sales margin from the previous exercise, what is the total ROI for the company during the current year?
Bouvous Corporation had the following information for 2015:Revenue $400,000Operating expenses 350,000Total assets 530,000What is the return on investment?
The balance sheet of Hidden Valley Farms reports total assets of $450,000 and $550,000 at the beginning and end of the year, respectively. Net income and sales for the year are $100,000 and $800,000, respectively. What is Hidden Valley's return on assets? Multiple Choice 10%. 20%. 160%. 18%.
Below is given the data for the assembly division of Charles Corporation: Sales Cost of Sales Operating Expenses $10,000,000 $15,000,000 Average Operating Assets $250,000,000 $310,000,000 2020 2021 $100,000,000 $165,000,000 $22,000,000 $28,000,000 Minimum Required Rate of Return Actual Cost of Capital Income Tax Rate Instructions 1. Compute the margin and turnover ratios for each year 2. Compute the ROI for each year 3. Compute the residual income for each year 4. Compute EVA for Charles Corporation for each year (Note: Round to 2 decimal) MacBook Air 9% 6% 30%
Allied Construction and Axis Construction reported the following information in their annual financial statements ($ in millions): Allied Construction 2021 2020 Sales $ 50,000 $ 45,000 Net income 3,900 4,000 Total assets 26,000 24,000 Axis Construction 2021 2020 Sales $ 87,000 $ 72,000 Net income 3,400 4,100 Total assets 53,000 64,000 Required: 1. Calculate Allied Construction's return on assets, profit margin, and asset turnover ratio for 2021. (Do not round your intermediate calculations. Round your answers to 2 decimal places.) 1-return on assets: _____% 2- profit margin: ________% 3-asset turnover: _____times 2. Calculate Axis Construction's return on assets, profit margin, and asset turnover ratio for 2021. (Do not round your intermediate calculations. Round your answers to 2 decimal places.) 1-return on assets: _____% 2- profit margin: ________% 3-asset turnover: _____times 3-a. Which company…
Average Rate of Return Method, Net Present Value Method, and Analysis for a service company The capital investment committee of Arches Landscaping Company is considering two capital investments. The estimated operating income and net cash flows from each investment are as follows: Front-End Loader Greenhouse Year OperatingIncome Net CashFlow OperatingIncome Net CashFlow 1 $55,000 $177,000 $116,000 $283,000 2 55,000 177,000 88,000 239,000 3 55,000 177,000 44,000 168,000 4 55,000 177,000 19,000 115,000 5 55,000 177,000 8,000 80,000 Total $275,000 $885,000 $275,000 $885,000 Each project requires an investment of $500,000. Straight-line depreciation will be used, and no residual value is expected. The committee has selected a rate of 12% for purposes of the net present value analysis. Present Value of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 0.890 0.826…
Average Rate of Return Method, Net Present Value Method, and Analysis for a service company The capital investment committee of Arches Landscaping Company is considering two capital investments. The estimated operating income and net cash flows from each investment are as follows: Front-End Loader Greenhouse Year OperatingIncome Net CashFlow OperatingIncome Net CashFlow 1 $58,000 $183,000 $122,000 $293,000 2 58,000 183,000 93,000 247,000 3 58,000 183,000 46,000 174,000 4 58,000 183,000 20,000 119,000 5 58,000 183,000 9,000 82,000 Total $290,000 $915,000 $290,000 $915,000 Each project requires an investment of $580,000. Straight-line depreciation will be used, and no residual value is expected. The committee has selected a rate of 10% for purposes of the net present value analysis. Present Value of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 0.890 0.826…
Suppose a company has research costs of $115,000 and development costs of $285,000 for the year. Under U.S. GAAP, what amount would be reported as an expense in the current year's Income statement? Multiple Choice $400,000 $115,000 $285,000 $200,000

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