Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Vertex Solutions operates multiple segments. The following financial statements apply to the segment named Xi Segment. Xi Segment Income Statement for the Year Ended September
Vertex Solutions operates multiple segments. The following financial statements apply to the segment named "Xi Segment."
Xi Segment Income Statement for the Year Ended September 30, Year 19:
- Sales Revenue: $700,000
- Cost of Goods Sold: $420,000
- Gross Margin: $280,000
- Operating Expenses: $160,000
- Depreciation Expense: $80,000
- Operating Income: $40,000
- Nonoperating Income: $60,000
- Loss on Sale of Equipment: $40,000
- Net Income: $60,000
Xi Segment Balance Sheet as of September 30, Year 19:
- Cash: $90,000
- Accounts Receivable: $125,000
- Inventory: $140,000
- Equipment (less accumulated depreciation): $300,000
- Total Assets: $655,000
- Accounts Payable: $100,000
- Notes Payable: $110,000
- Stockholders' Equity: $445,000
Required:
- Compute the ROI for Xi Segment.
- Vertex Solutions has a target ROI of 27%. Xi Segment has an investment opportunity of $600,000 at an ROI of 30%. Calculate the new ROI if the investment is made.
- Determine the net profit margin for Xi Segment.
- Calculate the asset turnover ratio for Xi Segment.
- Evaluate whether Xi Segment achieved the desired ROI after the new investment.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started