Question
Quiz Company reported the following information for the last year. Sales $4,000,000 Cost of goods sold 2,100,000 Gross margin 1,900,000 Operating expenses 1,100,000 Operating income
Quiz Company reported the following information for the last year.
Sales | $4,000,000 |
Cost of goods sold | 2,100,000 |
Gross margin | 1,900,000 |
Operating expenses | 1,100,000 |
Operating income | 800,000 |
Income taxes (40%) | 320,000 |
Net income | $480,000 |
Quiz Company began the year with operating assets of $2,700,000. At year end, operating assets were $2,300,000. Quiz Companys required rate of return was 15%, and the cost of capital was 12%. Total capital employed during the year was $1,400,000.
a. Determine margin for the year
c. Determine ROI for the year
d. Determine Residual Income (RI) for the year
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