116.
The following information is available about the Appliance Division of Rainier Company.
Rainier requires a return of 9% from all divisions.
Appliance Division
Earnings from
Operations
$18,462,000
Appliance Division
Sales
$112,600,000
Appliance Division
Identifiable Assets
$173,700,000
117.
Bleu Stone is a division of a major corporation. The following data are for the latest year of
operations:
Sales
$30,000,000
Net operating income
$1,170,000
Average operating assets
$8,000,000
The company’s minimum required
rate of return
18%
118.
Bleu Stone is a division of a major corporation. The following data are for the latest year of
operations:
Sales
$33,040,000
Net operating income
$1,453,760
Average operating assets
$8,000,000
The company’s minimum required
rate of return
18%
119.
120.
The following information is available about the Charger Division of Weston Company.
Weston requires a return of 8% from all divisions.
Charger Division Earnings from
Operations
$12,854,000
Charger Division Sales
$92,500,000
Charger Division Identifiable
Assets
$156,000,000
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121.
The following information is available about the status and operations for Division A of
Abad Company, which has a minimum required ROI of 20%.
Answer
each
item
independently
of
the
others.
Division A
$100,000
$35,000
$200,000
122.
The following information is available about the status and operations for Division B of
Abad Company, which has a minimum required ROI of 20%.
Answer
each
item
independently
of
the
others.
Division B
Divisional investment
$750,000
Divisional profit
$275,000
Divisional sales
$1,800,000
123.
Big Sky Industries is a division of a major corporation. The following data are for the latest
year of operations:
Sales
$24,900,000
Net operating income
$1,319,700
Average operating assets
$6,000,000
The company’s minimum required
rate of return
12%
124.
Big Sky Industries is a division of a major corporation. The following data are for the latest
year of operations:
Sales
$12,700,000
Net operating income
$1,054,100
Average operating assets
$5,000,000
The company’s minimum required
rate of return
16%
125.
126.
The Parts Division of the Stein Corporation had average operating assets of $150,000 and
net operating income of $27,800 in March. The company uses residual income to evaluate
the performance of its divisions, with a minimum required rate of return of 17%.
Required:
What was the Parts Division’s residual income in March?
127.
Edinger Industries is a division of a major corporation. The following data are for the latest
year of operations:
Sales
$20,760,000
Net operating income
$2,553,480
Average operating assets
$6,000,000
The company’s minimum required
rate of return
16%
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128.
The following information is available about the status and operations for Division A of
Triplex Company, which has a minimum required ROI of 10%.
Answer
each
item
independently
of
the
others.
Division A
$100,000
$17,500
$200,000
129.
The following information is available about the status and operations for Division B of
Tallon Company, which has a minimum required ROI of 20%.
Answer
each
item
independently
of
the
others.
Division B
Divisional investment
$1,500,000
Divisional profit
$550,000
Divisional sales
$3,600,000
130.
The Augment Manufacturing Company has three divisions: X Division, Y Division, and Z
Division. Operating results for the three divisions for last year were as follows:
Div X
Div Y
Div Z
Residual income
$98,400
$27,200
$12,000
Net operating
income
188,600
115,600
76,000
Average operating
assets
820,000
680,000
400,000
Sales
1,640,000
1,445,000
1,040,000
Profit margin
11.5%
8.0%
5.0%
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131.
14-118
132.
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133.
Three years ago, one division of the Calsone Enterprise Company purchased depreciable
assets costing $2,000,000. The cash flows from these assets for the past three years have
been:
Year
Cash Flows
1
$600,000
2
700,000
3
810,000
2
3
Year