Compute the expected ROI in 2027 for the Home Division, assuming the following independent changes to actual data. (RoundROI to 2 decimal places, eg. 1.57%)(1)Variable selling and administrative expenses are decreased by 5%.(2)Average operating assets are decreased by 20.0%.(3)Sales are increased by $199,000, and this increase is expected to increasecontribution margin by $84,000.The expected ROI%%%

Step 1:ROI stands for Return on Investment. It is a financial metric that evaluates the…

Answered: Compute the expected ROI in 2027 for…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter3: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 21MC: Macom Manufacturing has total contribution margin of $61,250 and net income of $24,500 for the month...

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Solano Company has sales of $520,000, cost of goods sold of $380,000, other operating expenses of $51,000, average invested assets of $1,650,000, and a hurdle rate of 8 percent. Several possible changes that Solano could face in the upcoming year follow. Determine each scenario’s impact on Solano’s ROI and residual income. (Note: Treat each scenario independently.)a. Company sales and cost of goods sold increase by 40 percent. What is the residual income? Thanks
Company XYZ is currently making sales of $200,000. At this level, the variable expenses viere $160,000 . Assume that company XYZ expects sales to increase to $450,003 in coming period with no change is expected to fixed expenses. How much is the expected change in profit ? a- Increase by $ 10,000 b -Increase by 40,000 C- increase by $ 50,000 D-be determined E- Increase by $160,000
Alpha Corporation recorded operating data for its Omega division for the year. Alpha requires its return to be 10%. Sales- P700,000; Controllable margin- P80,000; Total average assets- P2,000,000; Fixed costs- P50,000. What is the ROI for the year?
Solano Company has sales of $520,000, cost of goods sold of $380,000, other operating expenses of $51,000, average invested assets of $1,650,000, and a hurdle rate of 8 percent. Several possible changes that Solano could face in the upcoming year follow. Determine each scenario’s impact on Solano’s ROI and residual income. (Note: Treat each scenario independently.) b. Operating expenses decrease by $10,500. What is return on investment? What is residual income? Thanks
Philip Inc. expects their sales to increase by $900,000 next month. If their CMR is calculated as 48%, operating income of the next month would be expected to: Group of answer choices Increase by $432,000 Decrease by $468,000 Decrease by $432,000 Increase by $468,000
Concord Inc. is the only player in the classy snow shovel market. The variety of shovel designs includes camouflage (both green and pink, of course), snowman, beach, and northern lights. Concord purchases basic aluminum snow shovels from a supplier, applies its durable designs, and sells the shovels for $40 each. Last year, the company generated $52,000 in operating income, based on the following details. Sales volume in units Operating expenses DM cost per unit DL cost per unit Variable-MOH per unit Fixed-MOH per unit 9,500 $87,000 $6.00 $6.00 $8.00 $2.00 This year, the company realizes that its operating expenses will increase by $14,000 and its direct labor costs will increase by 20% per unit.
Consider the following information: ROI = 18.0%, Assets = $30,000, and Sales = $45,000. Use the DuPont formula to compute "margin."
Company XYZ is currently making sales of $200,000 . At this level , the variable expenses were $40,000 . Assume that company XYZ expects sales to increase $ 400,000 in the coming period with no change is expected to fixed expenses . How much is the expected change in profit ? a. Increase by $ 160,000 b. Cannot be determined c. Increase by $ 50,000 d. Increase by 40,000 e. Increase by $10,000
Coolbrook Company has the following information available for the past year: Sales revenue Cost of goods sold and operating expenses Net operating income Average invested assets The company's hurdle rate is 7.26 percent. Required: Calculate return on investment (ROI) and residual income for each division for last year. Recalculate ROI and residual income for each division for each independent situation that follows: a. Operating income increases by 11 percent. b. Operating income decreases by 10 percent. c. The company invests $259,000 in each division, an amount that generates $112,000 additional income per division. d. Coolbrook changes its hurdle rate to 5.26 percent. Complete this question by entering your answers in the tabs below. Calculate return on investment (ROI) and residual income for each division for last year. Note: Enter your ROI answers as a percentage rounded to two decimal places, (i .e., 0.1234 should be entered as 12.34% .) Sales revenue Cost of goods sold and…
One segment of D's Company has the following data: Operating assets of ₱5,000,000; Operating income of ₱750,000. Moreover, the company has a required target ROI of 14% for the said segment Compute the segment's ROI for the year. Assuming that operating assets for the next year increase by 10%. How much would operating income have to increase to reach the target?
Capital Investments has two divisions. Each division's required rate of return is 10%. Planned operating results for 2020 are as follows: (Click the icon to view the planned operating results.) Read the requirements. Requirement a. What is the current ROI for each division? Begin by selecting the formula to calculate ROI, then compute the ROI for each division. Measure of income + Measure of investment 12,350,000 95,000,000 10,640,000 56,000,000 Division A Division B Division A Division B Measure of income 12,350,000 10,640,000 Division A Division B Requirement b. What is the current residual income for each division? Begin by selecting the formula to calculate the residual income (RI), then compute the RI for each division. X Required rate of return Measure of investment 95,000,000 56,000,000 10 % 10 % $ ROI ... % % -( -( $ -($ ROI X 13 % 19 % = ) = ) = Requirement c. Capital is planning an expansion that will require each division to increase its investments by $25,000,000 and its…
For its three investment centers, Concord Company accumulates the following data: I Sales $2,280,000 $4,560,000 $4,560,000 Controllable margin 1,596,000 2,280,000 4,134,400 Average operating assets 5,700,000 8,350,000 11,400,000 The company expects the following changes for investment centers I, II, and III in the next year: investment center I to increase sales 15%, investment center II to decrease controllable fixed costs $392,000, and investment center III to decrease average operating assets $520,000. Compute the expected return on investment (ROI) for each center. Assume investment center I has a contribution margin percentage of 70%. (Round ROI to 1 decimal place, e.g. 1.5%.) The expected return on investment I % % III %

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