A family friend has asked your help in analyzing the operations of three anonymo

Question

A family friend has asked your help in analyzing the operations of three anonymous companies operating in the same service sector industry. Supply the missing data in the table below: (Loss amounts should be indicated by a minus sign. Round your percentage answers to nearest whole percent and other amounts to whole dollars.) Company $420,000 35,860 $163,000 $ 680,000 53,000 $278,947 $ 620,000 Sales Net operating income Average operating assets Return on investment (ROI) Minimum required rate of return $155,000 22 | % 191% Percentage 13% 101% Dollar amount $44,000 Residual income 5,000

Explanation / Answer

               Company                           A B C Sales 420,000 680,000 620,000 Net operating income 35,860 53,000 20,500 Average operating Assets 163,000 278,947 155,000 Return on investment(ROI) 22% 19% 13% minimum Required rate of return percentage: 13% 16% 10% Dollar amount 21190 44,000 15500 Residual income 14,670 9,000 5,000 ROI = net operating income/average operating assets Residual income = net operating income-(Average operating assets*min rate of return)

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