Exercise 10-1 Compute the Return on Investment (ROI) [LO10-1) Alyeska Services Company, a division of a major oil company provides various services to the operators of the North Slope oil field in Alaska. Data concerning the most recent year appear below. Sales Net operating income Average operating assets $ 17,400,000 $ 5,600,000 5 36,000,000 Required: 1. Compute the margin for Alyeska Services Company (Round your answer to 2 decimal places.) 2 Compute the turnover for Alyeska Services Company. (Round your answer to 2 decimal places.) 3. Compute the return on investment (ROI) for Alyeska Services Company. (Round your intermediate calculations and final answer to 2 decimal places.) % 1. Margin 2. Turnover 3. ROI % Exercise 10-8 Computing and Interpreting Return on Investment (ROI) [LO10-1] Selected operating data for two divisions of Outback Brewing, Ltd. of Australia are given below Sales Average operating assets Net operating income Property, plant, and equipment (net) Division New South Queensland Wales $ 1,302,800 $ 2,444,000 $ 620,000 $ 520,000 5 71,610 $ 61,180 $ 239,000 $ 189,000 Required: 1. Compute the rate of return for each division using the return on investment (ROI) formula stated in terms of margin and turnover 2 Which divisional manager seems to be doing the better job? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the rate of return for each division using the return on investment (ROI) formula stated in terms of margin and turnover. (Do not round Intermediate calculations, Round your answers to 2 decimal places.) Margin Turnover ROI Queensland division New South Wales division % % Romjuled Required 2 > Exercise 10-8 Computing and Interpreting Return on Investment (ROI) [LO10-1] Selected operating data for two divisions of Outback Brewing, Ltd., of Australia are given below: Sales Average operating assets Net operating income Property, plant, and equipment (net) Division New South Queensland Wales $ 1,302,000 $ 2,444,000 $ 620,000 $ 520,000 $ 71,610 $ 61,100 $ 239,000 $ 189,000 Required: 1. Compute the rate of return for each division using the return on investment (RON) formula stated in terms of margin and turnover. 2. Which divisional manager seems to be doing the better job? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Which divisional manager seems to be doing the better job? O Queensland division New South Wales division Exercise 10-12 Evaluating New Investments Using Return on Investment (ROI) and Residual Income [LO10-1, LO10-2) Selected sales and operating data for three divisions of different structural engineering firms are given as follows: Sales Average operating assets Net operating income Minimum required rate of return Division A $ 6,100,000 51,525,000 5 317,200 15.00% Division $ 10,100,000 $ 5,050,000 $ 929,200 18.405 Division $ 9,200,000 $ 2,300,000 $ 225,400 12.00 Required: 1. Compute the return on investment (ROI) for each division using the formula stated in terms of margin and turnover 2. Compute the residual income foss) for each division 3. Assume that each division is presented with an investment opportunity that would yield a 17% rate of return a. If performance is being measured by ROI, which division or divisions will probably accept or reject the opportunity? b. If performance is being measured by residual income, which division or divisions will probably accept or reject the opportunity? Complete this question by entering your answers in the tabs below. Reg 1 RG 2 RegJA Reg 3 Compute the residual income (loss) for each division. (Do not round intermediate calculations. Loss amounts should be indicated by a minus sign Division Division B Division Residual income (10) Exercise 10-12 Evaluating New Investments Using Return on Investment (ROI) and Residual Income [LO10-1, LO10-2) Selected sales and operating data for three divisions of different structural engineering firms are given as follows: Sales Average operating assets Net operating income Minimum required rate of return Division A $ 6,100,000 $ 1,525,000 $ 317,200 15.00 Divisione $ 10,100,000 $ 5,050,000 $ 929,200 18.40% Division $ 9,200,000 $ 2,300,000 5 225,460 12.00% Required: 1 Compute the return on investment (ROI) for each division using the formula stated in terms of margin and turnover 2. Compute the residual income (loss) for each division 3. Assume that each division is presented with an investment opportunity that would yield a 17% rate of return. a. If performance is being measured by ROI, which division or divisions will probably accept or reject the opportunity? b. If performance is being measured by residual income, which division or divisions will probably accept or reject the opportunity? Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Regu Reg 38 Assume that each division is presented with an investment opportunity that would yield a 17% rate of return. If performance is being measured by ROI, which division or divisions will probably accept or reject the opportunity Division A Division B Division C ( Req2 Req38 > Exercise 10-12 Evaluating New Investments Using Return on Investment (ROI) and Residual Income [LO10-1, LO10-2) Selected sales and operating data for three divisions of different structural engineering firms are given as follows: Sales Average operating assets Net operating income Minimum required rate of return Division A $ 6,100,000 $ 1,525,000 $ 317,209 15.00% Division B $ 10,100,000 $ 5,650,000 $ 929, 200 18.40% Division $ 9,200,000 $ 2,300,000 $ 225,400 12.00% Required: 1. Compute the return on investment (ROI) for each division using the formula stated terms of margin and turnover 2. Compute the residual income (loss) for each division 3. Assume that each division is presented with an investment opportunity that would yield a 17% rate of return a. If performance is being measured by ROI, which division or divisions will probably accept or reject the opportunity? b. If performance is being measured by residual income, which division or divisions will probably accept or reject the opportunity? Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Reg 3 Req 3B Assume that each division is presented with an investment opportunity that would yield a 17% rate of return. If performance is being measured by residual income, which division or divisions will probably accept or relect the opportunity? Division A Division B Division C