Requirement: Calculate the investment centers': 1) Sales Margin 2) Capital Turnover 3) Return on Investment (ROI) 4) Residual Income
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- Sales revenue Orange Corporation has two divisions: Fruit and Flower. The following information for the past year is available for each division: Fruit Division Flower Division $ 660,000 495,000 $ 165,000 $ 2,062,500 $ 990,000 742,500 $ 247,500 $ 1,375,000 Cost of goods sold and operating expenses Net operating income Average invested assets Orange has established a hurdle rate of 5 percent. Required: 1-a. Compute each division's return on investment (ROI) and residual income for last year. 1-b. Determine which manager seems to be performing better. 2. Suppose Orange is investing in new technology that will increase each division's operating income by $120,000. The total investment required is $1,500,000, which will be split evenly between the two divisions. Calculate the ROI and residual income for each division after the investment is made. 3. Determine whether both managers will support the investment. Complete this question by entering your answers in the tabs below. Req 1A Req 1B…A company has the following information available for three of its divisions. COMPANY INFORMATION FOR THREE DIVISIONS Division M Investment in Assets $ 1,200,000 Division N ? Division O $ 2,500,000 Operating Income Sales Revenue ? $ 160,000 250,000 ? $ 3,200,000 ? Profit Margin Ratio 10.00% ? 6.25% Required Rate of Return 10.00% 12.50% 15.00% Return on Investment 15.00% 20.00% ? What is Division O's sales revenue? $1,666,667. $4,000,000. $2,000,000. $ 375,000.A company's two divisions report the information below. Sales Electronics $ 81,000 Sporting Goods $40,000 Income 5,670 4,100 Average assets 40,500 25,000 Enter answers in the tabs below. Required 1 Required 2 Required 3 Calculate profit margin for each division. Division Electronics Sporting Goods Profit margin Numerator: Denominator: Profit margin Required 2 >
- Sales revenue Orange Corporation has two divisions: Fruit and Flower. The following information for the past year is available for each division: Fruit Division $ 1,320,000 990,000 $ 330,000 $ 5,000,000 Flower Division $1,980,000 1,485,000 $ 495,000 $ 1,980,000 Cost of goods sold and operating expenses Net operating income Average invested assets Orange has established a hurdle rate of 5 percent. Required: 1-a. Compute each division's return on investment (ROI) and residual income for last year. 1-b. Determine which manager seems to be performing better. 2. Suppose Orange is investing in new technology that will increase each division's operating income by $142,000. The total Investment required is $2,100,000, which will be split evenly between the two divisions. Calculate the ROI and residual income for each division after the investment is made. 3. Determine whether both managers will support the investment.Problem 2 Water Paints Inc. has two major Divisions and has collected the following information about them. Net Sales revenue Operating income Average Total Assets Stores $3,989,000 $480,000 $1,250,000 Consumer 1,425,000 185,000 1,500,000 Required: Calculate each Division’s ROI rounding all of your answers to three decimal places. Calculate each Division’s profit margin ratio. What do your results mean? Calculate each Division’s asset turnover ratio. Calculate each Division’s residual income (RI) the target rate of return is 10%Problem 2 Water Paints Inc. has two major Divisions and has collected the following information about them. Net Sales revenue Operating income Average Total Assets Stores $3,989,000 $480,000 $1,250,000 Consumer 1,425,000 185,000 1,500,000 Required: Calculate each Division’s ROI rounding all of your answers to three decimal places. Calculate each Division’s profit margin ratio. What do your results mean? Calculate each Division’s asset turnover ratio. Calculate each Division’s residual income (RI)
- XYZ Company has two divisions, A and B. Information for each division is as follows: Net earnings for division Asset base for division Target rate of return Margin Weighted average cost of capital What is the total sales amount for B? 1. P666,667 2. P800,000 3. P1,300,000 4. P1,200,000 A P 40,000 P100,000 15% 10% 12% B P 260,000 P1,200,000 18% 20% 12%Question: Vertical Analysis of the Income statement Company A Company B Net sales 2,300,000 300,000 Cost of goods sold 1,100,000 200,000 Gross profit 1,200,000 100,000 Operating Expenses: Administrative expenses 120,000 20,000 Marketing expenses 220,000 30,000 Research and Development 500,000 10,000 Total Operating expenses 840,000 60,000 Interest expense 200,000 10,000 Net income 160,000 30,000 Required: Prepare a vertical analysis of these two companies. Compare and contrast the financial situation of these two companies assuming that they are in the same industry. Discuss fully.The West Bank Company has three product lines as following: A B C Total Estimated Sales in Units 25000 100000 50000 175000 SP/ unit $10 $12 $7 VC/ unit ( $5) ($8) ($4) CM/ unit $5 $4 $3 FC for company $351000 Required: What is the operating income?
- Division A of Kern Co. has sales of $350,000, cost of goods sold of $200,000, operating expenses of $30,000, and invested assets of $600000. What is the return on investment for Division A? A. 20% B. 25% C. 33% D. 40%Return on investment The income from operations and the amount of invested assets in each division of Beck Industries are as follows: Income from Operations Invested Assets Retail Division $156,200 $710,000 Commercial Division 56,000 280,000 Internet Division 194,400 720,000 a. Compute the return on investment for each division. (Round to the nearest whole number.) Division Percent Retail Division fill in the blank 1 % Commercial Division fill in the blank 2 % Internet Division fill in the blank 3 % b. Which division is the most profitable per dollar invested?Return on investment The operating income and the amount of invested assets in each division of Conley Industries are as follows: Operating Income Invested Assets Retail Division $9,600,000 $40,000,000 Commercial Division 12,100,000 55,000,000 Internet Division 6,480,000 36,000,000 a. Compute the return on investment for each division. Division Percent Retail Division fill in the blank 1 % Commercial Division fill in the blank 2 % Internet Division fill in the blank 3 % b. Which division is the most profitable per dollar invested?