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 (i.e., 0.12 should be entered as 12).) Company $840,000 $630,000 Sales Net operating income Average operating assets Return on investment (ROI) Minimum required rate of return $360,000 38,000 $155,000 144,000 171% 201% Percentage 15% 101% Dollar amount 45,000 Residual income 4,000

Explanation / Answer

A B C Sales 360000 840000 630000 Net operating income 26350 38000 18400 Average operating assets 155000 190000 144000 Return on Investment 17% 20% 13% Minimum required rate of return: Percentage 15% 24% 10% Dollar amount 23250 45000 14400 Residual income 3100 -7000 4000

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