Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

1. Aguilera Industries is a division of a major corporation. Data concerning the most recent year appears below: Sales $18,310,000 Net operating income $1,171,840 Average

1. Aguilera Industries is a division of a major corporation. Data concerning the most recent year appears below:

Sales $18,310,000
Net operating income $1,171,840
Average operating assets $5,550,000

The division's turnover is closest to: (Round your answer to 2 decimal places.)

15.63

3.30

0.21

4.74

1b. Aguilera Industries is a division of a major corporation. Data concerning the most recent year appears below:

Sales $18,280,000
Net operating income $712,920
Average operating assets $4,360,000

The division's return on investment (ROI) is closest to: (Round your answer to 2 decimal places.)

3.90%

16.35%

12.50%

.90%

1c. The management of Fannin Corporation is considering dropping product H58S. Data from the company's accounting system appear below:

Sales $990,000
Variable expenses $395,000
Fixed manufacturing expenses $377,000
Fixed selling and administrative expenses $257,000

In the company's accounting system all fixed expenses of the company are fully allocated to products. Further investigation has revealed that $247,000 of the fixed manufacturing expenses and $208,000 of the fixed selling and administrative expenses are avoidable if product H58S is discontinued. What would be the effect on the company's overall net operating income if product H58S were dropped?

Overall net operating income would decrease by $39,000.

Overall net operating income would increase by $39,000.

Overall net operating income would increase by $140,000.

Overall net operating income would decrease by $140,000.

1d. Chee Corporation has gathered the following data on a proposed investment project: (Ignore income taxes in this problem.)

Investment required in equipment $410,000
Annual cash inflows $60,000
Salvage value $0
Life of the investment 16 years
Required rate of return 9%
The company uses straight-line depreciation. Assume cash flows occur uniformly throughout a year except for the initial investment.

The payback period for the investment is closest to:

0.1 years

1.0 years

4.8 years

6.8 years

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Auditing And Assurance Services An Integrated Approach

Authors: Arens, Elder, Beasley

9th Edition

0130646202, 9780130646200

More Books

Students also viewed these Accounting questions

Question

What is meant by 'Wealth Maximization ' ?

Answered: 1 week ago