Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. three divisions of jameson co. report the followin

Three divisions of Jameson Co. report the following sales and operating data: ...

90.2K

Verified Solution

Question

Accounting

Three divisions of Jameson Co. report the following sales and operating data:

Fitness Training Spa Services Athletic Wear
Sales $ 600,000 $ 750,000 $ 400,000
Average operating assets $ 200,000 $ 250,000 $ 100,000
Operating income $ 30,000 $ 37,500 $ 24,000
Minimum required rate of return 10 % 12 % 10 %

Required:
1.

Compute the ROI for each division, using the formula stated in terms of margin and turnover.

2.

Compute the residual income for each division.

3.

Assume that each division is presented with an investment opportunity that would yield a rate of return of 17%.

a.

If performance is being measured by ROI, which division or divisions will probably accept the opportunity?

b.

If performance is being measured by residual income, which division or divisions will probably accept the opportunity?

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

A manufacturer of an external hard disc provided the information that when the price per external...

Advance Math
Q

MULTIPLE CHOICE PLEASE ANSWER ASAP. THANK YOU. 8. A company with working capital of $375,551 and...

Accounting
Q

Find the standardized test statistic t to test the claim that H H Two samples...

Statistics
Q

H 34 4 3 2 1 1 3 5 2 TS Store 2

Algebra
Q

Last year Ann Arbor Corp had $155,000 of assets (which equals total invested capital), $305,000...

Accounting
Q

hi i need help answering questions step by step ...

Accounting
Q

for the next 12 years. Assume you will earn the historic stock market average of...

Accounting
Q

Ken, who owned a franchise, told told his his franchisor (head office) that he had...

Accounting
Q

X Company is considering buying a new machine that will cost $141,500 and that will...

Accounting
Q

(1) SMITH COMPUTER CENTER ...

Accounting
Q

orked 105 hou Harry Wadell spent 265 hours in the tax year working with Partnership...

Finance
Q

Common stock value-Constant growth Personal Finance Problem Over the past 6 years, Elk County Telephone...

Finance