Question
4. Selected operating data for Buzz Beer, Inc., are shown below: Sales $4,000,000 Variable costs and expenses $2,500,000 Controllable fixed costs $1,260,000 Controllable margin ?
4. Selected operating data for Buzz Beer, Inc., are shown below: Sales $4,000,000 Variable costs and expenses $2,500,000 Controllable fixed costs $1,260,000 Controllable margin ? Operating assets, beginning of the year $1,000,000 Operating assets, end of the year $1,200,000 Minimum desired rate of return on assets 12% Required (10 points total): Part A: Calculate return on investment (ROI) using DuPont Analysis! Part B: Calculate residual income (RI) Part C: Should the Buzz Beer manager take on a new project that has an ROI of 18% if performance is evaluated based on ROI? Why or why not? Part D: Should the Buzz Beer manager take on a new project that has an ROI of 18% if performance is evaluated based on RI? Why or why not?
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