Evaluating Investment Centers Terry Enterprises, Inc. has two divisions—the Food
ID: 2514376 • Letter: E
Question
Evaluating Investment Centers
Terry Enterprises, Inc. has two divisions—the Foods division and the Clothes division. Historically, Terry has used the division's ROI as the performance measure for the bonus determinations. Terry Foods division has gross total assets of $1,000,000, accumulated depreciation of $350,000, current liabilities of $250,000, and sales of $2,000,000. Foods' operating income is $240,000. Terry Clothes division has gross total assets of $5,000,000, accumulated depreciation of $2,100,000, current liabilities of $1,500,000, and sales of $8,000,000. Clothes' operating income is $790,000.
Use the DuPont formula to compute ROI for each division and for Terry Enterprises as a whole. Use operating income and gross total assets as the measures of income and investment.
Round answers to the nearest whole percentage.
Answer%
ROI Foods Answer% Clothes Answer% Terry EnterprisesAnswer%
CLICK HERE TO REVIEW LEARNING OBJECTIVES QUESTION 3 Not complete Points aut of 3.00 Flag question Evaluating Investment Centers Terry Enterprises. Inc. has two divisions-the Foods division and the Clothes division. Historically. Terry has used the division's ROI as the performance measure for the bonus determinations. Terry Foods division has gross total assets of $1,000,000, accumulated depreclation of $350,000, current labilities of $250,000, and sales of $2,000,000. Foods' operating Income is $240,000. Terry Clothes division has gross total assets of $5,000,000, accumulated depreciation of $2.100,000, current liabilities of $1.500.000, and sales of $8.000,000. Clothes' operating income is $790.000. Use the DuPont formula to compute ROI for each division and for Terry Enterprises as a whole. Use operating income and gross total assets as the measures of income and investment. Round answers to the nearest whole percentage. ROI Foods 0 96 Clothes Terry Enterprises CheckExplanation / Answer
Answer
Working
Foods
Clothes
Terry Enterprise
A
Operating Income
$240000
$790000
$1030000
B
Net Assets
$650000
$2900000
$3550000
A/B
ROI
37%
27%
29%
Working
Foods
Clothes
Terry Enterprise
A
Operating Income
$240000
$790000
$1030000
B
Net Assets
$650000
$2900000
$3550000
A/B
ROI
37%
27%
29%
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