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 ROl and Rate of Return Percentage answers to the nearest percentage.e., 0.12 should be entered as 12).) Company Sales Net operating income Average operating assets Return on investment (RO) Minimum required rate of return $400,000 $ 780,000 $610,000 54.000 $155,000 $156,000 23% 201% Percentage 151% 101% Dollar amount 41,000 Residual income 7,000

Explanation / Answer

A B C Sales 400000 780000 610000 Net operating income 35650 54000 22600 Average operating assets 155000 270000 156000 Return on Investment 23% 20% 14% Minimum required rate of return: Percentage 15% 15% 10% Dollar amount 23250 41000 15600 Residual income 12400 13000 7000

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