31 company branch has an investment turnover of 2 times. The minimum return on investment set as quota for the branch was 10%, which was 5% lower than actual RoI. What was the division’s return on sales based on operating income? a. 2.5 % b. 5.0 % c. 7.5 % d. 15.0%

31 company branch has an investment turnover of 2 times. The minimum return on investment set as quota for the branch was 10%, which was 5% lower than actual RoI. What was the division’s return on sales based on operating income? a. 2.5 % b. 5.0 % c. 7.5 % d. 15.0%

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

See similar textbooks

Related questions

Q: 3. Define fallacy and identify and explain eight common fallacies which are committed in everyday…

A: While we might state that an argument is fallacious or commits a fallacy, the term "fallacy" does…

Q: Header Motor, Inc., paid a $2.83 dividend last year. At a constant growth rate of 3 percent, what…

A: Dividend discount model will be used here. As per the dividend discount model the value of a stock…

Q: The table below shows the expected rates of return for three stocks and their weights in some…

A: Answer to part 1:- Expected return is the mean return calculated on the basis of the probability of…

Q: Given a compounded interest rate equivalent 13.25% compounded quarterly for 3.5 years. Find the…

A: Accumulated factor value refers to the value or multiple times, an amount of investment will become…

Q: Medwig Corporation has a DSO of 36 days. The company averages $8,000 in sales each day (all…

A: DSO means days sales outstanding. It means number of days it takes credit sales to be converted into…

Q: for the next 5 years. And after that it is assumed to have a g indefinitely. The dividend paid for…

A: The price of stock can be found from the constant dividend growth model of that depend on the…

Q: Finance State whether you agree or disagree with the following statement. "If you decide against…

A: Bankruptcy cost is something when a company mainly and solely depended on debts and used more amount…

Q: Briefly inform these stakeholders of the benefits of automation on the current business processes…

A: As per our guidelines we are supposed to answer only one question (if there are multiple questions…

Q: QUESTION 7 Consider the market for a bond which has a face value of $2,000, pays a coupon of $100,…

A: Solution: Yield to maturity means that the rate of return earned by an investor.

Q: An investor buys a five-year, 7.5% annual coupon bond priced to yield 5%. The investor plans to sell…

A: Par Value of Bond is $1000 Coupon rate is 7.5% Yield is 5% Time to maturity is 5 years Bond is sold…

Q: Compute standard deviation for this stock.

A: Given:- State of Economy Probability Expected Return Recession 10% -30% Below Average 20%…

Q: ZBD Inc is issuing a 20-year bond with a par value of $1,000. The bond will pay its holders a…

A: The following information has been provided in the question: Life of bond = 20 years Par value=$1000…

Q: Looking at the opinion of Wong from Areca Capital, which forex exposures would be most relevant for…

A: Forex transactions: Companies engaged in international trade are exposed to changes in the…

Q: When investing for a long term, investors care about the volatility of A. mean, average B. mean,…

A: Volatility is used to measure the tendency of security in stock exchange wherein the security price…

Q: A US government bond in the amount of $1,000 will mature in six years, has no coupon payments, and…

A: To calculate the value of this bond we will use the below formula Value of bond = FV/(1+r)n Where…

Q: 6) Finance XYZ is a retailer and sells 179,000 units per year. It purchases from a single supplier.…

A: Economic order quantity: An instrument called an EOQ is used to calculate the quantity and…

Q: Balance sheet Assets (in KD) Cash 130000 Accounts receivable 100000 Inventory 210000 Property,…

A: Balance sheet is referred as the financial statements, which used to report the assets,…

Q: Question 1…

A: Effective annual rate The genuine interest rate on an investment or loan is the effective yearly…

Q: The following table gives abbreviated balance sheets and income statements for Walmart. At the end…

A: (Note: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the…

Q: a. What is the value of the bond if the market's required yield to maturity on a comparable-risk…

A: Bond Value: The value of the bond is derived by discounting all its coupon payments and the par…

Q: Calculate free cash flow for 2017 for Monarch Textiles, Inc., based on the financial information…

A: Formula for Free cash flow = EBIT * (1- Tax rate) + Depreciation- Change in working capital -…

Q: Your friend plans to invest $1,000 per month into an account expected to have an effective annual…

A: Here, EAR is 6.2% Monthly payment (PMT) is $1,000 Required Amount (FV) is $100,000

Q: Green Valley Ltd currently has the following capital structure: Debt: $2,500,000 paying 8.5% coupon…

A: The following information is given: 1. Debt = $2,500,000, 8.5% coupon and before-tax yield to…

Q: A U.S. firm, sells merchandise today to a British company for £100,000. The current exchange rate is…

A: Money market hedge: A money market hedge is a method for controlling exchange rate or currency risk.…

Q: Calculate the value of a preferred stock that pays a dividend of $6.50 per share when the market's…

A: Value of preferred stock depends on its dividends and on the required yield. Essentially it is the…

Q: What is the present value of regular perpetuity paying $1500 per month if the discount rate is 8.4%…

A: Given Information: Monthly perpetual payments = $1500 Annual interest rate = 8.4%

Q: It is a tax on a person's income, payments, profits arising from property, the practice of the…

A: The government imposes different types of taxes on people. Some taxes are in the form of direct…

Q: a. Calculate the future growth rate for Solarpower's earnings. b. If the investor's required…

A: Dividend discount model refers to a stock valuation model which is used by the company for…

Q: eturn of the DAX 30 Index, the index consisting of the 30 major German blue-chip stocks. Vanguard…

A: Mutual funds are units of fund in which any small investors can buy and sell from the market. Mutual…

Q: A telephone costs $50 in the United States. Today, in the currency markets you observe the…

A: Based on the information given in the above question we need to convert the price of telephone in…

Q: An investor buys a five-year, 7.5% annual coupon bond priced to yield 5%. The investor plans to sell…

A: Par Value of Bond is $1000 Coupon rate is 7.5% Yield is 5% Time to maturity is 5 years Bond is sold…

Q: The following data available for Delicious Catering Ltd. Account Beginning balance Ending…

A: Sources of Cash means generating cash through various mode By increasing the share capital we can…

Q: Bob makes his first $1,600 deposit into an IRA earning 7.8% compounded annually on his 24th birthday…

A: We need to use future value of ordinary annuity formula to calculate future value at year 44. Future…

Q: From February to March * January 43 February 77 March 77 April May O Oscillate Gradual increase…

A: 1.Gradual increase- The line will move on an upward direction at a fixed rate over a period of…

Q: An investor buys a five-year, 7.5% annual coupon bond priced to yield 5%. The investor plans to sell…

A: Par Value of Bond is $1000 Coupon rate is 7.5% Yield is 5% Time to maturity is 5 years Bond is sold…

Q: Find the degree of financial leverage of a business having earnings before interest and taxes of…

A: Financial Leverage is firms ability to use fixed financial charges to magnify effect of changes in…

Q: Construct the amortization schedule for a $16,000.00 debt that is to be amortized in 12 equal…

A: Amount of Debt is $16,000 Interest rate per half year is 6% Total number of semi annual payments…

Q: In October 2008, six-month (182-day) Treasury bills were issued at a discount of 1.42%. What was the…

A: Treasury bills are short term financial instruments that are issued by the US treasury with a…

Q: Knob, Inc., is a nationwide distributor of furniture hardware. The company now uses a central…

A: As per the given information: Credit sales - $198.00 million Flat fee of First National - $150,000…

Q: ABC sold boxes of candles at P1,000 each. For each box, ABC incurs variable cost of P750. Daily…

A: The question is related to Management of Accounts Receivables and Evaluation of credit policy Since…

Q: It is a tax on the value of an article increased at each stage of its production or distribution.…

A: Excise tax is a type of indirect tax employed in case of specific goods (eg. fuel, tobacco,…

Q: A firm is expected to pay a dividend of $2.35 next year and $2.50 the following year. Financial…

A: The value of a stock is equal to the present value of dividends expected plus the present value of…

Q: ose you deposit $50 at the beginning of every month in a bank account that earns 1% interest per…

A: More is compounding of interest rates more is effective interest rate and more is interest…

Q: An investor buys a five-year, 7.5% annual coupon bond priced to yield 5%. The investor plans to sell…

A: Par Value of Bond is $1000 Coupon rate is 7.5% Yield is 5% Time to maturity is 5 years Bond is sold…

Q: PLEASE DO THIS COMPLETELY AND TYPEWRITTEN. I WILL UPVOTE. ELABORATE ON THE ANSWERS. SKIP THIS IF YOU…

A: The Net Present Value is calculated with the help of following formula Net Present Value = Present…

Q: Maggie’s Skunk Removal Corp.’s 2021 income statement listed net sales of $12.8 million, gross profit…

A: The question is related to Ratio Analysis. 1. Gross Profit Margin is calculated by dividing Gross…

Q: How are spot exchange rates determined? Multiple Choice predicting future currency movements in…

A: Spot exchange rate is the current market price of echanging one perticular currencyin another…

Q: 1. Dividends: (Essay) a. Define what is Dividend b. Enumerate the types of dividend and define each.…

A: Dividend in simple words can be described as a reward, in cash or otherwise, that a corporation…

Q: An investor wants to save money to purchase real estate. He annuity with quarterly payments that…

A: Future value of annuity includes the amount deposited and amount of interest accumulated over the…

Q: From April to May * 42 January February 77 77 March April 9 May 73 June O Sharp drop O Moderate…

A: April = 77 May = 43

Question

company branch has an investment turnover of 2 times. The minimum return on investment set as quota
for the branch was 10%, which was 5% lower than actual RoI. What was the division’s return on sales based
on operating income?
a. 2.5 %
b. 5.0 %
c. 7.5 %
d. 15.0%

Formula Formula ROI (%) = Net Income Principal Amount × 100

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Similar questions

Shalom Company provided you the following data: Average operating assets 120,000 Margin on sales Minimum required rate of return Return on investment Sales Turnover What is the residual income? 15% 20% 25% 300,000 2.50
4. Return on Investment, Residual Income & ROI Pricing For each of the following independent cases, the minimum desired Return on Investment (ROI) is 20%. Division LBM P 700,000 P 42,000 (5) (6) (7). (8) P 22,000 Sales Operating Income Operating Assets Margin Turnover Return on Investments Residual Income Division Lugaw P 400,000 (1). (2) 15% (3). 30% (4). Division Lugaw Unit selling price: P 20 Total fixed costs: P 100,000 Division LBM • Unit selling price: P 700 Total fixed costs: P 258,000 REQUIRED: 1. Compute for each division's missing items (1) to (8). 2. How many more units shall be sold by Lugaw to achieve a 40% ROI? 3. How much increase in selling price will allow LBM to reach 50% ROI from its current unit sales?
Kyle Corporation provides the following information for the Product Division and Service Division for the year. Product Division Service Division 420,000 $ 650,000 195,000 245,000 640,000 610,000 14.0% 14.0% Net sales Operating income Average total assets Target rate of return $ Requirement 1. Calculate the return on investment for each division. (Enter answers as a percent rounded to the nearest hundredth percent, X.XX%) The return on investment for the Product Division is The return on investment for the Service Division is Requirement 2. Which division has the highest ROI? % % Requirement 3. Calculate the residual income for each division. (Round answers to the nearest whole dollar.) The residual income for the Product Division is The residual income for the Service Division is Requirement 4. Which division has the highest residual income?
Assume the Residential Division of Kopper Faucets had the following results last year: Net sales revenue Operating income Average total assets Management's target rate of return What is the division's ROI? OA. 48% OB. 15% O C. 320% OD. 208% $ 16,000,000 2,400,000 5,000,000 15% ***
Selected data from Division A of Green Company are as follows: Sales $ 630,000 Average investment $ 491,400 Operating income $ 81,900 Minimum rate of return 15% If the minimum rate of return was 11% (instead of the percentage shown above), Division A's residual income (RI) would be:
Division Y has generated sales revenue of $260,000 and achieved operating income of $18,500 using $20,000 of invested assets. If management desires a minimum rate of return of 10%, the profit margin would be _____. a.14.4% b.19.5% c.7.1% d.10.2%
For its three investment centers, Monty Company accumulates the following data. 11 $1,960,000 $3,920,000 Controllable margin 1,470,000 2,116,800 Average operating assets 4,900,000 7,840.000 Sales Compute the return on investment (ROI) for each center. Return on investment Madla % ||| $3,920,000 3,724,000 9,800,000 % 111
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
Coolbrook Company has the following information available for the past year: River Stream Division Division Sales revenue $1,200,000 900,000 $1,800,000 1,300,000 Cost of goods sold and operating expenses Net operating income $ 300,000 $ 500,000 Average invested assets $1,200,000 $1,800,000 The company's hurdle rate is 6 percent. Required: 1. Calculate return on investment (ROI) and residual income for each division for last year. 2. Recalculate ROI and residual income for each division for each independent situation that follows: a. Operating income increases by 10 percent. b. Operating income decreases by 10 percent. c. The company invests $250,000 in each division, an amount that generates $100,000 additional income per division. d. Coolbrook changes its hurdle rate to 10 percent. Complete this question by entering your answers in the tabs below. Req 1 Reg 2A Req 28 Reg 20 Reg 2D Calculate return on investment (ROI) and residual income for each division for last year. (Enter your ROI…
A division of Wheeler Co. reported ROI of 20%. If the division's asset turnover was 5, the profit margin must have been: A. 100% B. 25% C. 4% D. 2%
Refer to the following information. What are the sales for Division B? Sales Net operating income Average operating assets Return on investment Margin Turnover Target ROI $208,333 O $120,000 $18,000 O $1,250,000 $1,200,000 Division A Division B ? ? $48,000 $420,000 ? 0.2 2.1 17% $18,000 ? ? 15% 0.015 14% Division C $1,345,000 $82,000 ? ? ? 20% 8%
The Magazine Division of XYZ publication Company had the following financial data for the year: Assets available for use P 1,000,000 BV P1,500,000 MV Residual income P 100,000 Return on investment 15% A. What was the Magazine Division’s segment income? B. If the manager of the Magazine Division is evaluated based on return on investment, how much would she willing to pay for an investment that promise to increase net segment income by P50,000?

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS