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. Do not round intermediate calculations. Round your answers to nearest whole number.) pany Sales Net operating income Average operating assets Return on investment (ROI) Minimum required rate of return: S 430,000 670,000 48,000 S 620,000 S 153,000 S 150,000 15% 19% 13% 13% Percentage Dollar amount $ 59,000 Residual income 5,000

Explanation / Answer

Fill missing amount :

Company A Company B Company C Sales 430000 670000 620000 Net operating income 153000*15% = 22950 48000 19500+5000 = 24500 Average operating asssets 153000 48000*100/19 = 252632 150000 Return on investment (ROI) 15% 19% 24500*100/150000 = 16% Minimum required rate of return Percentage 13% 59000*100/252632 = 23% 13% Dollar amount 153000*13% = 19890 59000 150000*13% = 19500 Residual income 22950-19890 = 3060 -11000 5000

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