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 Sales Net operating income Average operating assets Return on investment (ROI) Minimum required rate of return: $ 390,000 $ 820,000 $ 37,000 680,000 $ 170,000 $ 147,000 171% 171% 171% Percentage Dollar amount 101% $ 55,000 Residual income 7,000

Explanation / Answer

A B C Sales 390000 820000 680000 Net operating income 28900 37000 21700 Average operating assets 170000 217647 147000 Return on investment 17% 17% 15% Minimum required rate of return: Percentage 17% 25% 10% Dollar amount 28900 55000 14700 Residual income 0 -18000 7000

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