Answer the following problems and present your solutions

Q1. Caryl Company had the following information pertaining to 2009:

Profit 100,000

Sales 1,000,000

Asset turnover ratio 2 times

The desired minimum rate of return is 15%.

1. What is the ROI?

2. What is the return on sales?

3. What is the amount of assets?

4. The manager of Caryl is paid a bonus on ROI. Would the manager invest in a project that will pay a return on investment of 18%? Explain?

5. What is Caryls residual income?

Q2. Consider the following:

Investment centers after-tax operating income 50,000

Investment centers total assets 800,000

Investment centers current liabilities 80,000

Weighted-average cost of capital 6.5%

Minimum required ROI 8%

What is the economic value added (EVA)?

Q3. Segment A generated sales revenues of 400,000 and variable operating expenses of 180,000. Its controllable fixed expenses were 40,000. It was assigned 20% of 200,000 of fixed costs by others. The common fixed costs were 25,000. What was Segment As controllable segment profit margin?