Question : 31) Paymaster Company provided the following information for 2001. Revenue$200,000 Operating assets70,000 Net operating : 1196215

 

31)

Paymaster Company provided the following information for 2001.

 

Revenue$200,000

Operating assets70,000

Net operating income110,000

Total assets04,500

 

Required:

 

What is the return on investment? 31)

______ A)

0.55 B)

1.57 C)

1.05 D)

0.59 E)

2.25

Use the information below to answer the following question(s).

 

Thacker Company has two regional offices. The data for each is as follows:

 

EdmontonSarnia

Revenues$

290,000$

298,000

Total assets$2,900,000$4,500,000

Net operating income$

600,000$1,200,000

32)

What is the Edmonton Division’s return on investment? 32)

______ A)

0.21 B)

0.27 C)

0.25 D)

2.06 E)

0.48

33)

What is the return on investment for the Sarnia division? 33)

______ A)

0.48 B)

0.25 C)

0.21 D)

2.06 E)

0.27

34)

Keeping all other factors constant, which of the following would not cause an increase in the return on investment? 34)

______ A)

actions that increase revenues B)

actions that increase sales C)

actions that decrease investments D)

actions that increase liabilities E)

actions that decrease expense

35)

An automotive dealership, with a book value of $3,000,000, and total assets of $5,000,000, has a long history of earning 18%. Last year, the company earned $900,000. The owner is considering acquiring another dealership in a nearby town. If the expansion increases sales by 50%, what is the maximum amount of investment the owner can make in the new dealership in order to maintain his desired 18% return? 35)

______ A)

$9,000,000 B)

$3,000,000 C)

$1,350,000 D)

$2,500,000 E)

$5,000,000

36)

The Dupont method of profitability analysis is 36)

______ A)

TA – CL / operating income B)

ROI X RI C)

ROI / WACC D)

ROI X WACC E)

[revenue / investment] X [income / revenue]

37)

The top management at Munchie Company, a manufacturer of computer games, is attempting to recover from a flood, which destroyed some of their accounting records. The main computer system was also severely damaged. The following information was salvaged:

 

Alpha DivisionBeta DivisionGamma Division

Sales$2,500,000(a)$1,150,000

Net operating income$1,500,000$650,000$ 575,000

Total assets(b)(c)$ 766,667

Return on investment0.250.15(d)

Return on sales(e)0.100.5

Investment turnover(f)(g)1.5

 

What is the value of the Total assets belonging to the Alpha Division? 37)

______ A)

$6,434,434 B)

$6,500,000 C)

$7,151,800 D)

$6,000,000 E)

$4,333,333

Use the information below to answer the following question(s).

 

The top management at Munchie Company, a manufacturer of computer games, is attempting to recover from a flood, which destroyed some of their accounting records. The main computer system was also severely damaged. The following information was salvaged:

 

Alpha DivisionBeta DivisionGamma Division

Sales$2,500,000(a)$1,150,000

Net operating income$1,500,000$650,000$

575,000

Total assets(b)(c)$

766,667

Return on investment0.250.15(d)

Return on sales(e)0.100.5

38)

What is the value of the Total assets belonging to the Beta Division? 38)

______ A)

$7,151,800 B)

$4,654,252 C)

$5,952,380 D)

$6,500,000 E)

$4,333,333

39)

What is the Gamma Division’s return on investment? 39)

______ A)

0.80 B)

0.60 C)

0.25 D)

0.75 E)

0.42

40)

Costs recognized in particular situations that are not recognized by accrual accounting procedures are 40)

______ A)

cash accounting costs. B)

incremental costs. C)

imputed costs. D)

opportunity costs. E)

capital costs.

 

 

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