A family friend has asked your help in analyzing the operations of three anonymo
ID: 2527226 • Letter: A
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 ROI and Rate of Return Percentage answers to the nearest percentage (i.e., 0.12 should be entered as 12).)
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 ROI and Rate of Return Percentage answers to the nearest percentage (i.e., 0.12 should be entered as 12).)
Company A B C Sales $400,000 $690,000 $510,000 Net operating income $36,000 Average operating assets $164,000 $147,000 Return on investment (ROI) 25 % 18 % % Minimum required rate of return: Percentage 18 % % 14 % Dollar amount $47,000 Residual income $6,000Explanation / Answer
Company A B C Sales $400,000 $690,000 $510,000 Net operating income 164000*25%= 41000 $36,000 20580+6000=26580 Average operating assets $164,000 36000*100/18 = 200000 $147,000 Return on investment (ROI) 25 % 18 % 18 % Minimum required rate of return: Percentage 18 % 23.5% % 14 % Dollar amount 29520 $47,000 147000*14% = 20580 Residual income 11480 -11000 $6,000
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