I have an accounting homework i need to get done. it is only 3 questions. 2 questions are single and 1 has 4 parts. not very difficult i just dont have time. I attached the screenshots of the questions below
value: 10.90 polnts A family friend has asked 1,rour help in analyzing the operations of three anonymous companies operating in the same service sector industry. Supply the missing data in the table below: {Loss amounts should be indicated by a minus sign. Enter your ROI and Rate of Return Percentage answers to the nearest percentage {i.e.. 11.12 should he entered as 121.} _l ssssssssssssrsssss __l_l sssssssisstmsssou \"pp _l_l_ nn _l_l_ _l_l_ value: 10.00 polnts Comparative data on three companies in the same service industry are given below. Required: 2. Fill in the missing information_{Round your Turnover answers to 2 decimal places. Round your Margin and ROI percentage answers to 2 decimal places {i.e.. (1.1234 should he entered as 12.34;.) ssss __II_I sssssssssssssssss __I_I mam _I_I_ ssssssisssmsssssn ma 4. Suppose that the company's minimum required rate of return on operating assets is 15.00% and that performance is evaluated using residual income. a. Compute the Ofce Products Division's residual income for the most recent year, also compute the residual income as it would appear if the new product line is added. [Enter your Minimum Required Rate as a whole percentage [i.e.. {1.12 should be entered as 121.} _I_I_I wam Actual net operating income Minimum nni nnnmiinn innnmii _I_I_I Residuai innnmn mum-r.- h. Under these circumstances, it you were in Dell Hayasi's position, would you accept or reject the new product line? 0' Accept G Reject Required: 1. Compute the [ltce Products Division's RDI tor the most recent year, also compute the RDI as it would appear if the new product line is added. [Do not round intermediate calculations. Round vour Turnover answers to 2 decimal places. Round vour Margin and Rl percentage answers to 2 decimal places [i.e.. {11234 should be entered as 12.3%.} Sales Net operating income __I_I_ Tm _I_I_ 2. It you were in Dell Havasi's position, would you accept or reject the new product line\"? 0 Accept O Reject 3-. Wl'gr do vou suppose headquarters is anxious for the Ofce Products Division to add the new product line? 0 Adding the new line would Increase the company's overall Rl. 0 Adding the new line would Decrease the companv's overall ROI. 3 value: 10.00 points \"I know headquarters wants us to add that new product line,\" said Dell Havasi, manager of Billings Company's Office Products Division. \"But I want to see the numbers before I make any move. Our division's return on investment {ROI} has led the company for three years, and I don't want any letdown.\" Billings Company is a decentralized wholesaler with five autonomous divisions. The divisions are evaluated on the basis of ROI, with yearend bonuses given to the divisional managers who have the highest ROls. Operating results for the company's Office Products Division for the most recent year are given below: Sales 115 21,200,000 'v'ariable expenses 13,405,500 Contribution margin ?,?94,400 Fixed expenses 5,950,000 Net operating income $ 1,944,400 Divisional operating assets 15 4,240,000 The company had an overall return on investment {ROI} of 19.00% last year (considering all divisions}. The Office Products Division has an opportunity to add a new product line that would require an additional investment in operating assets of $2,500,000. The cost and revenue characteristics of the new product line per year would be: Sales 5 9,100,000 \"i-3"3"'33' Sprint "5' Required: 1. Compute the Office Products Division's ROI forthe most recent year; also compute the ROI as it would appear if the new product line is added. (Do not round intermediate calculations. Round your Turnover answers to 2 decimal places. Round your Margin and ROI percentage answers to 2 decimal places (i.e., 0.1234 should be entered as 12.34\" Sales Net operating income Operating assets Margin Tomover ROI 2, If you were in Dell Hevasi's position would you accept or reject the new product line? _' Accept Reject 3-. Why do you suppose headquaners is anxious for the Office Products Division to add the new product line? _-' Adding the newline would Increase the company's overall ROI. _' Adding the newline would Decrease the company's overall ROI. 111- Sprint "5' 4, Suppose that the company's minimum required rate of return on operating assets is 160MB and that performance is evaluated using residual income a, Compute the Office Products Division's residual income for the most recent year: also compute the residual income as it would appear if the new product line is added. [Enter your Minimum Required Rate as a whole percentage (i.e., 0.12 should be entered as 12).) Operating assets Minimum required return Minimum net operating income Actual net operating income Minimum net operating income Residual income b, Under these circumstances. if you were in Dell Havasi's position. would you accept or reject the new product line? '_' Accept Q Reject Answer 1: A Sales Net operating income Average operating assets ROI Minimum required rate of return Percentage Dollar amount Residual income 2 A Sales Net operating income Average operating assets Margin Turnover ROI B C 490000 830000 28880 51000 152000 268421.1 19.00% 19.00% 680000 26460 142000 18.63% 17.00% 25840 3040 13.00% 18460 8000 18.25% 49000 2000 B C 3318000 2680000 398160 402000 1580000 3350000 12.00% 15.00% 2.10 0.80 25.20% 12.00% 7752000 465120 3230000 6.00% 2.40 14.40% Answer 3: Sales Net operating income Operating assets Margin Turnover ROI Present New line Total 21200000 9100000 30300000 1844400 646100 2490500 4240000 2600000 6840000 8.70% 7.10% 8.22% 5.00 3.50 4.43 43.50% 24.85% 36.41% Reject adding the new line would increase the company's overall ROI. Present New line Total Operating assets 4240000 2600000 6840000 Minimum required return 16% 16% 16% Minimum net operating income (Operating assets * mi 678400 416000 1094400 Actual net operating income (given) 1844400 646100 2490500 Less: Minimum net operating income (above) 678400 416000 1094400 Residual income 1166000 230100 1396100 Accept Net operating income for A: Average operating assets for B: ROI for C Percentage for B Dollar amount for A: Dollar amount for C Residual income for A: Residual income for B: 152000*19% 51000/19% 26460/142000 49000/268421 152000*17% 142000*13% 28880-(152000*17%) 51000-(268421*18.25) Sales for C = Net operating income for C = Average operating assets for B = Margin for B Turnover for A = Turnover for B = ROI for A = ROI for B = 2.4*3230000 7752000*6% 402000/12% 402000/3350000 3318000/1580000 2680000/3350000 2.10*12% 0.80*15% Net operating income for new line = Margin = Turnover = ROI = 9100000-(9100000*65%)-2538900 Net operating income / Sales Sales / Operating assets Margin * turnover "I know headquarters wants us to add that new product line,\" said Dell Havasi. manager of Billings Company's foe Pro-duets Division. I'But | wantto see the numbers before I make any move. Durdivision's retum on investment {ROI} has led the oompany for three years. and I don't want any letdown.\" Billings I[tompany is a deoentralized wholesaler with ve autonomous divisions. The divisions are evaluated on the basis of ROI, with yearend bonuses given to the divisional managers who have the highest Rls. Operating results for the oompany's Ofce Products Division for the most recent year are given below: Sales $ 21,21 1|ul'ariable expenses 13,5, Contribution margin IMAGE Fixed expenses 5,9501 Net operating income $ 1,3443% Divisional operating assets $ 4,24D1DEIEI The company had an overall retum on investment {ROI} of 19.DD% last year {oonsidering all divisions}. The Foe Products Division has an opportunity to add a new product line that would require an additional investment in operating assets of $2.5i. The cost and revenue oharaoteristios of the new produot line per year would be: Sales 33 9,11 Variable expenses 55% of sales Fixed expenses 95 25351905 ' Required: 2. Fill in 'ie missing inforrnaticn.[Round your Turnover answers to 2 decimal places. Round your Margin and ROI percentage answers to 2 decimal places [i.e., (1.1234 should be entered as 12.34).) Answer is complete but net entirely correct --- s men -s m -s ww- --- mmmm --m- mmm Answer 1: A Sales Net operating income Average operating assets ROI Minimum required rate of return Percentage Dollar amount Residual income 2 A Sales Net operating income Average operating assets Margin Turnover ROI B C 490000 830000 28880 51000 152000 268421.1 19.00% 19.00% 680000 26460 142000 18.63% 17.00% 25840 3040 13.00% 18460 8000 18.25% 49000 2000 B C 3318000 2680000 398160 402000 1580000 3350000 12.00% 15.00% 2.10 0.80 25.20% 12.00% 7752000 465120 3230000 6.00% 2.40 14.40% Answer 3: Sales Net operating income Operating assets Margin Turnover ROI Present New line Total 21200000 9100000 30300000 1844400 646100 2490500 4240000 2600000 6840000 8.70% 7.10% 8.22% 5.00 3.50 4.43 43.50% 24.85% 36.41% Reject adding the new line would increase the company's overall ROI. Present New line Total Operating assets 4240000 2600000 6840000 Minimum required return 16% 16% 16% Minimum net operating income (Operating assets * mi 678400 416000 1094400 Actual net operating income (given) 1844400 646100 2490500 Less: Minimum net operating income (above) 678400 416000 1094400 Residual income 1166000 230100 1396100 Accept Net operating income for A: Average operating assets for B: ROI for C Percentage for B Dollar amount for A: Dollar amount for C Residual income for A: Residual income for B: 152000*19% 51000/19% 26460/142000 49000/268421 152000*17% 142000*13% 28880-(152000*17%) 51000-(268421*18.25) Sales for C = Net operating income for C = Average operating assets for B = Margin for B Turnover for A = Turnover for B = ROI for A = ROI for B = 2.4*3230000 7752000*6% 402000/12% 402000/3350000 3318000/1580000 2680000/3350000 2.10*12% 0.80*15% Net operating income for new line = Margin = Turnover = ROI = 9100000-(9100000*65%)-2538900 Net operating income / Sales Sales / Operating assets Margin * turnover
