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Determining Missing Items from Computations Data for the North, South, East and West divisions of Free Bird Company are as follows: Sales Income from Operations
Determining Missing Items from Computations
Data for the North, South, East and West divisions of Free Bird Company are as follows:
Sales | Income from Operations | Invested Assets | Return on Investment | Profit Margin | Investment Turnover | ||||||||
North | $860,000 | (a) | (b) | 17.5% | 7.0% | (c) | |||||||
South | (d) | $51,300 | (e) | (f) | 4.5% | 3.8 | |||||||
East | $1,020,000 | (g) | $680,000 | 15.0% | (h) | (i) | |||||||
West | $1,120,000 | $89,600 | $560,000 | (j) | (k) | (l) |
a. Determine the missing items, identifying each by the letters (a) through (l). If required, round percents and investment turnover to one decimal place.
a. | $ | ||||||||||
b. | $ | ||||||||||
c. | |||||||||||
d. | $ | ||||||||||
e. | $ | ||||||||||
f. | % | ||||||||||
g. | $ | ||||||||||
h. | % | ||||||||||
i. | |||||||||||
j. | % | ||||||||||
k. | % | ||||||||||
l. |
b. Determine the residual income for each division, assuming that the minimum acceptable rate of return established by management is 12%.
Division | Residual Income |
North Division | $ |
South Division | $ |
East Division | $ |
West Division | $ |
c. Which division is the most profitable in terms of (1) return on investment and (2) residual income?
Most Profitable | |
1. Return on Investment | |
2. Residual Income |
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