Question
1a) Robichau Inc. reported the following results from last years operations: Sales $ 6,300,000 Variable expenses 4,930,000 Contribution margin 1,370,000 Fixed expenses 803,000 Net operating
1a) Robichau Inc. reported the following results from last years operations:
Sales | $ | 6,300,000 |
Variable expenses | 4,930,000 | |
Contribution margin | 1,370,000 | |
Fixed expenses | 803,000 | |
Net operating income | $ | 567,000 |
Average operating assets | $ | 3,000,000 |
At the beginning of this year, the company has a $900,000 investment opportunity with the following characteristics:
Sales | $ | 1,530,000 | |
Contribution margin ratio | 30 | % of sales | |
Fixed expenses | $ | 306,000 | |
The companys minimum required rate of return is 20%.
The residual income for this year's investment opportunity when considered alone is closest to:
Garrison 16e Rechecks 2018-08-12
Multiple Choice
a) ($27,000)
b) $153,000
c) $179,100
d) $0
1b)
Babak Industries is a division of a major corporation. Last year the division had total sales of $19,560,000, net operating income of $1,877,760, and average operating assets of $6,000,000.
The division's turnover is closest to:
Multiple Choice
a) 3.26
b) 10.42
c) 0.31
d) 2.48
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