21) Which of the following incorporates the amount of investment into a performance measure?
A) dividend income
B) residual income
C) return on investment
D) both residual income and return on investment
E) both dividend income and residual
Use the information below to answer the following question(s).
Berger Publishing has two divisions which operate autonomously. Their results for the past year were as follows:
Toronto
Vancouver
Sales
$5,000,000
$6,000,000
Contribution margin
2,500,000
3,000,000
Operating income
2,000,000
3,500,000
Investment base (total assets)
6,500,000
7,500,000
The company’s desired rate of return is 15%.
22) What are the respective return-on-investment ratios for the Toronto and Vancouver divisions?
A) 0.04; 0.58
B) 0.31; 0.47
C) 0.38; 0.40
D) 0.77; 1.25
E) 0.38; 0.45
23) What are the respective residual incomes for the Toronto and Vancouver divisions?
A) $975,000; $1,125,000
B) $1,025,000; $1,125,000
C) $1,025,000; $2,375,000
D) $2,375,000; $1,025,000
E) $1,075,000; $1,125,000
24) Which of the following is true concerning the ROI performance measure?
A) ROI is based on cash flow.
B) Is also called the accounting rate of return.
C) Some companies use net assets (assets minus liabilities) as the numerator.
D) The usual formulation is [total assets/ income ].
E) Net assets are sometimes used as the denominator, and net assets are sometimes used as the numerator.
25) During the past year Badger Company had a net income of $175,000. What is the ROI if the investment is $25,000?
A) 0.142
B) 2.500
C) 5.140
D) 7.000
E) 5.450
26) The most popular approach to incorporating the investment base into a performance measure is
A) income on return.
B) opportunity cost.
C) return on investment.
D) residual income.
E) economic value added.
27) Paymaster Company provided the following information for the year just ended.
Revenue
$200,000
Operating assets
70,000
Net operating income
110,000
Total assets
104,500
What is the return on investment?
A) 2.25
B) 1.57
C) 1.05
D) 0.59
E) 0.55
Use the information below to answer the following question(s).
Thacker Company has two regional offices. The information for each is as follows:
Edmonton
Sarnia
Revenues
$290,000
$298,000
Total assets
$2,900,000
$4,500,000
Net operating income
$600,000
$1,200,000
28) What is the Edmonton Division’s return on investment?
A) 0.21
B) 0.27
C) 0.48
D) 2.06
E) 0.25
29) What is the return on investment for the Sarnia division?
A) 0.21
B) 0.27
C) 0.48
D) 2.06
E) 0.25
30) Keeping all other factors constant, which of the following would not cause an increase in the return on investment?
A) actions that increase revenues
B) actions that increase liabilities
C) actions that decrease investments
D) actions that decrease expense
E) actions that increase sales
Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.
You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.
Read moreEach paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.
Read moreThanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.
Read moreYour email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.
Read moreBy sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.
Read more