Question
Sales Contribution margin Operating income Average operating assets Weighted average cost of capital Sprint Company has a target ROI of 20 percent. a) Calculate
Sales Contribution margin Operating income Average operating assets Weighted average cost of capital Sprint Company has a target ROI of 20 percent. a) Calculate the following measures for Division A: (2 points each) i. Margin ratio: ii. iii. Sporadic Company has the following data for 2021: Division A $400,000 160,000 80,000 320,000 15% V. Turnover ratio: ROI: iv. Residual income: EVA: b) Compare and discuss the advantages and disadvantages of the following performance measures: ROL, EVA, and Residual Income. (5 points)
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a Calculation of performance measures for Division A i Margin ratio Contribution Margin Sales 160000 400000 04 or 40 ii Turnover ratio Sales Average operating assets 400000 320000 125 times iii ROI Op...Get Instant Access to Expert-Tailored Solutions
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Advanced Accounting
Authors: Joe Ben Hoyle, Thomas Schaefer, Timothy Doupnik
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