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value: 10.00 points A family friend has asked your help in analyzing the operati

ID: 2532563 • Letter: V

Question

value: 10.00 points 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 (ie, 0.12 should be entered as 12).) Company $430,000 $600,000 $840,000 $40,000 Sales Net operating income Average operating assets Return on investment (ROI) Minimum required rate of return $157,000 $146,000 24 % 171% Percentage 16% 91% Dollar amount 57,000 Residual income 6,000

Explanation / Answer

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Company A Working B Working C Working Sales $        430,000 $           840,000 $       600,000 Net Operating Income $          37,680 157000 x 24% $             40,000 $         19,140 13140 + 6000 Average Operating Assets $        157,000 $     235,294.12 40000 / 17% $       146,000 Return on Investment (ROI) 24% 17% 13% 19140 / 146000 Minimum required rate of return: Percentage 16% 24% 57000 / 235294.12 9% Dollar Amount $          25,120 157000 x 16% $             57,000     $         13,140 146000 x 9% Residual Income $          12,560 37680 - 25120 $           (17,000) 40000 - 57000 $           6,000 ROI = Net Operating Income / Average Operating Asset