Suppose Alexandra Pater, the manager of the Food and Lodging Division at Winter Wonderland Resort, has hired you as a consultant to help her examine her division's performance under several different circumstances.

1. Type the data that follow into an Excel spreadsheet to compute the division's actual return on investment and residual income (Data are from parts 3 and 4 of this chapter's Review Problem.) Match your data entries to the rows and columns shown below.

2. Patel would like to know how the figures would change if Food and Lodging had a desired ROI of 40 percent and average assets invested of $10,000,000. Revise your spreadsheet from 1 to compute the division's return on investment and residual income under those conditions.
3. Patel also wants to know how the figures would change if Food and Lodging had a desired ROI of 30 percent and average assets invested of $12,000,000. Revise your spreadsheet from 1 to compute the division's return on investment and residual income under those conditions.
4. Does the use of formatted spreadsheets simplify the computation of ROI and residual income? Do such spreadsheets make it easier to perform "what-if"analyses?

Transcribed Image Text:

Food and Lodging Divsion Actual Resurts 54D,00,003 S 5453003 Sales Cperating incame Ceired RO Return on Investnent Prult Marg Asset Turnover Reidua hoone so% (D5,D6) 05D4) 105-07 6)