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. Enter your ROI and Rate of Return Percentage answers to the nearest percentage (i.e., 0.12 should be entered as 12).) Company $340,000 $710,000 $ 660,000 Sales Net operating income Average operating assets Return on investment (ROI) Minimum required rate of return: $51,000 $159,000 $145,000 22% 191% 0 Percentage 171% 141% Dollar amount $58,000 Residual income 5,000

Explanation / Answer

1.

$34,980

(159000×22%)

$25,300

(20300+5000)

$268,420

(51000/19%)

17%

21.61%

(58000/268420)

14%

$27,030

(159,000×17%)

$20,300

(145,000×14%)

$7,950

(34980-27030

A B C Sales $340,000 $710,000 $660,000 Net operating income

$34,980

(159000×22%)

$51,000

$25,300

(20300+5000)

Average operating assets $159,000

$268,420

(51000/19%)

$145,000 Return on investment(net operating income/average operating assets) 22% 19% 17.45% Minimum required rate of return: Percentage

17%

21.61%

(58000/268420)

14%

Dollars amount(average operating asset×minimium required rate of return)

$27,030

(159,000×17%)

$58,000

$20,300

(145,000×14%)

Residual income(net operating income-minimiun required return(dollar))

$7,950

(34980-27030

(7,000) $5,000

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.