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please reply asap!! Mickey Entertainment Limited runs a number of nightclubs. Each nightclub's manager has the authority to make investments as needed and they are
please reply asap!!
Mickey Entertainment Limited runs a number of nightclubs. Each nightclub's manager has the authority to make investments as needed and they are evaluated mostly on ROI. Club Pluto has reported the following information for the year ended December 31, 2020 Sales Operating income Average operating assets Minimum required rate of return $1,200,000 200,000 1,000,000 12% Required: Consider the following questions independently. Carry out all calculations to two decimal places. A. Compute Club Pluto's Rol and residual income. B. Assume that the manager of the club can increase sales by $35,000 and as a result operating income will increase by $5,000 without any increase in operating assets. What would the club's ROI be now? C. The owner of the company feels that an investment in operating assets of $120,000 will increase sales by $90,000 and operating income by $20,000. If you were the manager of Club Pluto would you want to make the change. Why or why not? D. Using the information in part C would your answer change if you were evaluated on residual income. Why or why not Step by Step Solution
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