Question
Table 1: Riverbend Studios current year data Entertainment Streaming Parks Revenues $54,583,520 $30,184,570 $7,564,270 Fixed COGS $3,356,850 $4,074,530 $3,159,430 Variable COGS $40,257,310 $22,020,695 $3,698,928 #
Table 1: Riverbend Studios current year data
Entertainment | Streaming | Parks | |
Revenues | $54,583,520 | $30,184,570 | $7,564,270 |
Fixed COGS | $3,356,850 | $4,074,530 | $3,159,430 |
Variable COGS | $40,257,310 | $22,020,695 | $3,698,928 |
# of customers | 15,264,200 | 1,420,060 | 30,240 |
# of employees | 11,562 | 1,954 | 1,378 |
Average net operating assets | $29,014,000 | $19,252,000 | $420,000 |
Selling and admin costs | $3,259,520 | $944,620 | $231,900 |
1. Summarize this years company performance by preparing a segmented income statement similar to the following format (If a division has negative operating income, please calculate negative income tax, i.e., an addback, for that division):
Entertainment | Streaming | Parks | Overall | |
Sales | ||||
COGS | ||||
Gross Margin | ||||
Allocated overhead | ||||
Selling and administrative | ||||
Operating Income | ||||
Tax expense | ||||
Divisional income |
2. Based on the appropriate segmented income value, calculate current ROI, residual income and EVA for the three divisions. Please display ROI percentages in percentage format with two decimal places.
3. Calculate NPV and IRR and use them to evaluate Entertainments decision not to invest in the new animation studio. Was the decision appropriate and in the best interests of Riverbend Studios?
4. Evaluate the validity of Angela Imanahs complaint regarding her evaluated performance. Explain why it is or is not valid.
5. Perform a basic differential analysis showing the effect on operating income if Parks is shut down. Explain whether Parks should be shut down. We suggest using the following format for your financial analysis:
Current | Parks Closed | Difference | |
Marriott Revenue | |||
CM | |||
Fixed COGS | |||
Selling and Admin | |||
Allocated Corporate | |||
Operating Income |
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