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Exercise 11-9 Return on Investment (ROI) and Residual Income Relations [LO11-1, LO11-2] ...

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Accounting

Exercise 11-9 Return on Investment (ROI) and Residual Income Relations [LO11-1, LO11-2]

A family friend has asked your help in analyzing the operations of three anonymous companies operating in the same service sector industry. Supply the missing data in the table below: (Loss amounts should be indicated by a minus sign. Round your percentage answers to nearest whole percent)

Company

A

B

C

Sales

$370,000

$780,000

$620,000

Net operating income

$38,000

Average operating assets

$152,000

$150,000

Return on investment (ROI)

23

%

16

%

%

Minimum required rate of return:

Percentage

15

%

%

9

%

Dollar amount

$59,000

Residual income

$6,000

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