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Cabell Products is a division of a major corporation. Last year the division had total sales of $10,400,000, net operating income of $540,800, and average
Cabell Products is a division of a major corporation. Last year the division had total sales of $10,400,000, net operating income of $540,800, and average operating assets of $2,392,000. The company's minimum required rate of return is 16%. The division's residual income is closest to: Multiple Choice $540,800 $158,080 O $(765,440) O $923,520 The following data are for the Akron Division of Consolidated Rubber, Inc.: Sales Net operating income Average operating assets Stockholders' equity Residual income $810,000 $ 51,000 $310,000 $ 81,000 $ 21,000 For the past year, the margin used in ROI calculations was: Multiple Choice 6.30% O 8.97% O O 10.00% 8.89% C Boney Corporation processes sugar beets that it purchases from farmers. Sugar beets are processed in batches. A batch of sugar beets costs $43 to buy from farmers and $29 to crush in the company's plant. Two intermediate products, beet fiber and beet juice, emerge from the crushing process. The beet fiber can be sold as is for $13 or processed further for $49 to make the end product industrial fiber that is sold for $97. The beetjuice can be sold as is for $61 or processed further for $53 to make the end product refined sugar that is sold for $97. What is the financial advantage (disadvantage) for the company from processing one batch of sugar beets into the end products industrial fiber and refined sugar rather than not processing that batch at all? Multiple Choice ($174) per batch ($4) per batch o $20 per batch O $27 per batch
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