Assignment
1. The West Division of Frede Corporation had average operating assets of $638,000 and net operating income of $78,000 in December. The minimum required rate of return for performance evaluation purposes is 14%.
What was the West Division's minimum required return in December?
A. $78,000
B. $89,320
c. $10,920
D. $100,240
2. Given the following data:
|
Return on investment
|
22%
|
|
Turnover
|
2.6
|
|
Margin
|
8%
|
|
Sales
|
$110,000
|
|
Average operating assets
|
$40,000
|
|
Minimum required rate of return
|
16%
|
The residual income would be:
A. $2,400
B. $0
C.$5,600
C. $8,800
3. Cabal Products is a division of a major corporation. Last year the division had total sales of $28,540,000, net operating income of $2,597,140, and average operating assets of $5,708,000. The company's minimum required rate of return is 10%.
The division's margin is closest to: (Round your answer to 1 decimal place.)
A. 9.1%
B. 45.5%
C. 91.0%
D. 20.0%