Juniper Design Limited of Manchester, England, is a company specializing in providing design services to residential developers. Last year the company had net operating income of $450,000 on sales of $1,800,000. The company's average operating assets for the year were $2,000,000 and its minimum required rate of return was 11%. Required: Compute the company's residual income for the year. Residual income
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- Exercise 10-2 (Algo) Residual Income [LO10-2] Juniper Design Limited of Manchester, England, is a company specializing in providing design services to residential developers. Last year the company had net operating income of $490,000 on sales of $2,000,000. The company's average operating assets for the year were $2,200,000 and its minimum required rate of return was 15%. Required: Compute the company's residual income for the year. Residual incomeExercise 14-46 (Algo) Compare ROI Using Net Book and Gross Book Values (LO 14-2, 5) The Street Division of Labrosse Logistics just started operations. It purchased depreciable assets costing $40.0 million and having a four-year expected life, after which the assets can be salvaged for $8.0 million. In addition, the division has $40.0 million in assets that are not depreciable. After four years, the division will have $40.0 million available from these non depreciable assets. This means that the division has invested $80 million in assets with a salvage value of $48.0 million. Annual operating cash flows are $12.8 million. In computing ROI, this division uses beginning-of-year asset values in the denominator. Depreciation is computed on a straight-line basis, recognizing the salvage values noted. Ignore taxes. Required: a. & b. Compute ROI, using net book value and gross book value. Note: Enter your answers as a percentage rounded to 2 decimal place (i.e., 32.10). Year 1 Year 2 Year 3…12. Z Division of XYZ Corp. has the following information for 2002: Assets available for $1,800,000 10% Target rate of return Residual income What was Z Division's return on investment for 2002? (M) a 15% b. 10% $270,000 C. 25% d. 20% Barfield
- Current Attempt in Progress Your Answer Bonita Industries had sales of $500000, variable costs of $580000, and direct fixed costs totaling $100000. The company's average operating assets total $980000 and its required return is 13%. What is the company's residual income? 4 $372600 $-307400 Correct Answer $452600 O $127400Exercise 11-1 (Algo) Compute the Return on Investment (ROI) [LO11-1] Alyeska Services Company, a division of a major oll company, provides various services to the operators of the North Slope oll field in Alaska. Data concerning the most recent year appear below: Sales Net operating income Average operating assets Required: 1. Compute the margin. Note: Round your answer to 2 decimal places. 2. Compute the turnover. $ 17,400,000 $ 4,700,000 $ 35,200,000 Note: Round your answer to 2 decimal places. 3. Compute the return on Investment (ROI). Note: Round your Intermediate calculations and final answer to 2 decimal places. 1. Margin 2. Turnover 3. ROI %Required information Problem 03.036 DEPENDENT MULTI-PART PROBLEM - ASSIGN ALL PARTS A process for producing the mosquito repellant Deet has an initial investment of $205,000 with annual costs of $55,000. Income is expected to be $90,000 per year. Problem 13.036.b: Calculate the breakeven point What is the annual breakeven production quantity for both payback periods if net profit, that is, income minus cost, is $10 per gallon? When i=0%, the annual breakeven production quantity is determined to be 3504 gallons per year. When 12%, the annual breakeven production quantity is determined to be 1914 gallons per year.
- P10-8 Break-even analysis The production of a new product required Zion Manufacturing Co. to lease additional plant facilities. Based on studies, the following data have been made available: Estimated annual sales—24,000 units Amount Per unit Estimated costs: Materials .......................................... $ 96,000 $4.00 Direct labor........................................ 14,400 0.60 Factory overhead ................................. 24,000 1.00 Administrative expense........................... 28,800 1.20 Total............................................. $163,200 $6.80 Selling expenses are expected to be 5% of sales, and net income is to amount to $2.00 per unit. Required: 1. Calculate the selling price per unit. (Hint: Let “X” equal the sell- ing price and express selling expense as a percentage of “X.”) 2. Prepare an absorption costing income statement for the year ended December 31, 2016.…Question 1 UEM Construction Sdn Bhd is considering investing in a new construction equipment costing RM150,000. Its life is expected to be four years and it will have no scrap value at the end of this period. The following details are given relating to the machinery's activities: i, Unit selling price is RM40.00 and unit variable costs of production are: RM Direct materials 6.00 Direct ļabour 3.80 Variable overheads 5.20 ii. Sales volume relating to production of the construction equipment is expected to be: Year Sales Volume (units) 1 2,100 2,200 2,500 2,600 2 3 4 iii. Fixed costs amount to RM12,000 per annum. One quarter of the fixed costs is cash flow related items. iv. The company anticipates a cost of capital to be 10%.I need help with questions 4/5/6A Lou Barlow, a divisional manager for Sage Company, has an opportunity to manufacture and sell one of two new products for a five-year period. His annual pay raises are determined by his division’s return on investment (ROI), which has exceeded 21% each of the last three years. He has computed the cost and revenue estimates for each product as follows: Product A Product B Initial investment: Cost of equipment (zero salvage value) $ 210,000 $ 420,000 Annual revenues and costs: Sales revenues $ 290,000 $ 390,000 Variable expenses $ 136,000 $ 186,000 Depreciation expense $ 42,000 $ 84,000 Fixed out-of-pocket operating costs $ 74,000 $ 54,000 The company’s discount rate is 19%. Click here to view Exhibit 8B-1 and Exhibit 8B-2, to determine the appropriate discount factor using tables. Required: 1. Calculate the payback period for each product. (Round your answers to 2 decimal places.)…
- Q.1 Krishna Gems Ltd has just installed Equip.-R at a cost of Rs 2,00,000. The machinehas a five year life with no residual value. The annual volume of production isestimated at 1,50,000 units, which can be sold at Rs 6 per unit. Annual operatingcosts are estimated at Rs 2,00,000 (excluding depreciation) at this output level.Fixed costs are estimated at Rs 3 per unit for the same level of production.Krishna Gems Ltd has just come across another model called Equip.-S capable ofgiving the same output at an annual operating cost of Rs 1,80,000 (exclusive ofdepreciation). There will be no change in fixed costs. Capital cost of this machine isRs 2,50,000 and the estimated life is for 5 years with no residual value.The company has an offer for sale of Equip.-R at Rs 1,00,000. The cost ofdismantling and removal will be Rs 30,000. As the company has not yet commencedoperations, it wants to sell Machine-R and purchase Equip.-S. Nine Gems Ltd will bea zero-tax company, for seven years in view of…The S Company provides you with the following information on its products: Unit selling price Unit variable costs and expenses P100 75 Fixed costs and expenses per year P600,000 It has been estimated that during a temporary shutdown o four months, fixed costs and expenses can be reduced by 20%, although additional costs of maintenance and security of P18,000 has to be incurred. REQUIRED: 1. At what point in units would loss from operations be equal to shutdown costs? Prove by preparing an income statement. 2. How many units must be sold to avoid a loss? Prove also the answer by preparing an income statement. 3. How much is the net advantage or disadvantage of shutting down during the 4- month period? 4. Assuming that the additional cost for security will not change at P18,000, compute again for shutdown point, if the shutdown would be: a. Three months b. Six months c. Five months d. One yearRequired Information [The following Information applies to the questions displayed below.] Megamart provides the following Information on its two Investment centers. Investment Center Electronics Sporting goods Sales $ 63,460,000 19,050,000 1. Compute return on Investment for each center. Using return on investment, which center is most efficient at using assets to generate Income? 2. Assume a target Income of 12% of average assets. Compute residual income for each center. Which center generated the most residual Income? 3. Assume the Electronics center is presented with a new Investment opportunity that will yield a 14% return on Investment. Should the new Investment opportunity be accepted? The target return is 12%. Complete this question by entering your answers in the tabs below. Numerator: Required 1 Required 2 Required 3 Compute return on investment for each center. Using return on investment, which center is most efficient at using assets to generate income? Income $ 3,173,000…