The following information pertains to Bishop Concrete: The company\'s imputed in
ID: 2599350 • Letter: T
Question
The following information pertains to Bishop Concrete:
The company's imputed interest rate is 8%.
rev: 10_29_2012
11.
Required information
The capital turnover is:
16.92.
22.73.
26.00.
5.91.
3.85.
12.
Required information
The sales margin is:
4.40%.
32.00%.
13.75%.
16.92%.
26.00%.
13.
Required information
The ROI is:
26.00%.
4.40%.
13.75%.
16.92%.
32.00%.
14.
Required information
The residual income is:
$58,000.
$52,000.
$46,000.
$90,000.
$101,200.
Sales revenue $2,500,000 Gross margin 800,000 Income 110,000 Invested capital 650,000Explanation / Answer
Answer:-11)-Capital turnover ratio= Sales Revenue/Invested capital
= $2500000/$650000
=3.85 times
12)-Sales margin =Net income/Sales revenue*100
=$110000/$2500000*100
= 4.4%
13) Return on investment = Income from operations /Average operating assets*100
=$110000/$650000*100
= 16.92%
Where:-
Average operating assets = Invested capital
14)- Residual income= Net Operating income – (Average operating assets* Minimum required rate of return)
= $110000 –($650000*8%)
= $110000 - $52000
= $58000
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