Eady Wares is a division of a major corporation. The following data are for the latest year of operations: Sales$19,600,000 Net operating income$470,400 Average operating assets$5,000,000 The company's minimum required rate of return 10%?Required:?a. What is the division's margin??b. What is the division's turnover??c. What is the division's return on investment (ROI)??d. What is the division's residual income?
What will be an ideal response?
a.
Margin = Net operating income ÷ Sales = $470,400 ÷ $19,600,000 = 2.4%
b.
Turnover = Sales ÷ Average operating assets = $19,600,000 ÷ $5,000,000 = 3.9
c.
ROI = Net operating income ÷ Average operating assets = $470,400 ÷ $5,000,000 = 9.4%
d.
Residual income = Net operating income ? Minimum required rate of return × Average operating assets = $470,400 ? 10% × $5,000,000 = ($29,600)
You might also like to view...
Workers, managers, and members of the board are examples of ________ publics
A) general B) internal C) local D) citizen-action E) media
Ms. Rich has just bought a new $30,000 car. As a reasonably safe driver, she believes that there is only a 5% chance of being in an accident in the forthcoming year. If she is involved in an accident, the damage to her new car depends on the severity of the accident. The probability distribution for the range of possible accidents and the corresponding damage amounts (in dollars) are shown in the table below. Ms. Rich is trying to decide whether she is willing to pay $170 each year for collision insurance with a $300 deductible. Note that with this type of insurance, she pays the first $300 in damages if she causes an accident, and the insurance company pays the remainder.
Distribution of Accident Types and Corresponding Damage Amounts Type of AccidentConditional ProbabilityDamage to Car Minor0.60 $200 Moderate0.20 $1,000 Serious0.10 $4,000 Catastrophic0.10 $30,000 Why is there a kink in the line for the "Buy Insurance" line in the above strategy region chart? What will be an ideal response?
Which agency establishes rules for treating both hazardous and nonhazardous forms of solid waste?
a. The National Environmental Policy Act b. The Toxic Substances Control Act c. The Safe Drinking Water Act d. The Resource Conversation and Recovery Act
Criminal defendants have the right to a lawyer at all the important stages of the criminal process
Indicate whether the statement is true or false