Selected sales and operating data for three divisions ofdifferent structural engineering firms are given...

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Accounting

Selected sales and operating data for three divisions ofdifferent structural engineering firms are given as follows:Division A Division B Division C Sales $ 12,280,000 $ 35,350,000 $20,280,000 Average operating assets $ 3,070,000 $ 7,070,000 $5,070,000 Net operating income $ 601,720 $ 600,950 $ 567,840Minimum required rate of return 10.00 % 10.50 % 11.20 % Required:1. Compute the return on investment (ROI) for each division usingthe formula stated in terms of margin and turnover. 2. Compute theresidual income (loss) for each division. 3. Assume that eachdivision is presented with an investment opportunity that wouldyield a 11% rate of return. a. If performance is being measured byROI, which division or divisions will probably accept or reject theopportunity? b. If performance is being measured by residualincome, which division or divisions will probably accept or rejectthe opportunity?
Compute the return on investment (ROI) for each division usingthe formula stated in terms of margin and turnover. (Do not roundintermediate calculations. Round your answers to 2 decimalplaces.)
Margin Turnover ROI
Division A % %
Division B % %
Division C % %
Compute the residual income (loss) for each division. (Do notround intermediate calculations. Loss amounts should be indicatedby a minus sign.)
Division A Division B Division C
Residual income (loss)
Assume that each division is presented with an investmentopportunity that would yield a 11% rate of return. If performanceis being measured by ROI, which division or divisions will probablyaccept or reject the opportunity?
Division A
Division B
Division C
Assume that each division is presented with an investmentopportunity that would yield a 11% rate of return. If performanceis being measured by residual income, which division or divisionswill probably accept or reject the opportunity?
Division A
Division B
Division C

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Answer Answer1Division A Margin Net operating income Sales100 60172012280000100 49 Turnover Sales Average operating assets 122800003070000 4 Return on investment MarginTurnover 494 196 See Answer

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In: AccountingSelected sales and operating data for three divisions ofdifferent structural engineering firms are given as...Selected sales and operating data for three divisions ofdifferent structural engineering firms are given as follows:Division A Division B Division C Sales $ 12,280,000 $ 35,350,000 $20,280,000 Average operating assets $ 3,070,000 $ 7,070,000 $5,070,000 Net operating income $ 601,720 $ 600,950 $ 567,840Minimum required rate of return 10.00 % 10.50 % 11.20 % Required:1. Compute the return on investment (ROI) for each division usingthe formula stated in terms of margin and turnover. 2. Compute theresidual income (loss) for each division. 3. Assume that eachdivision is presented with an investment opportunity that wouldyield a 11% rate of return. a. If performance is being measured byROI, which division or divisions will probably accept or reject theopportunity? b. If performance is being measured by residualincome, which division or divisions will probably accept or rejectthe opportunity?Compute the return on investment (ROI) for each division usingthe formula stated in terms of margin and turnover. (Do not roundintermediate calculations. Round your answers to 2 decimalplaces.)MarginTurnoverROIDivision A % %Division B%%Division C%%Compute the residual income (loss) for each division. (Do notround intermediate calculations. Loss amounts should be indicatedby a minus sign.)Division ADivision BDivision CResidual income (loss) Assume that each division is presented with an investmentopportunity that would yield a 11% rate of return. If performanceis being measured by ROI, which division or divisions will probablyaccept or reject the opportunity?Division ADivision BDivision CAssume that each division is presented with an investmentopportunity that would yield a 11% rate of return. If performanceis being measured by residual income, which division or divisionswill probably accept or reject the opportunity?Division ADivision BDivision C