Exercise 9-8 Return on Investment (ROI) and Residual Income Relations [LO1, LO2]
ID: 2504651 • Letter: E
Question
Exercise 9-8 Return on Investment (ROI) and Residual Income Relations [LO1, LO2]
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: (Negative amounts should be indicated with a minus sign. Do not round immediate calculations, but round your final answers to the nearest whole number.)
Company
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: (Negative amounts should be indicated with a minus sign. Do not round immediate calculations, but round your final answers to the nearest whole number.)
Explanation / Answer
A B C SALES 480,000 700,000 520,000 Net operating Income 37200 40,000 24,830 Avg operating asset 155,000 222222.2 153,000 ROI 24% 18% 16.22876 Min Req, Rate of return percentage 14% 25% 11% Dollar amount 21700 56,000 16830 Residual Income 133,300 -16,000 8,000
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