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MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
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Phoniex University
Oct-2001 - Nov-2016
EXERCISE 11–8 Return on Investment (ROI) and Residual Income Relations [LO1, LO2]
A family friend has asked your help in analyzing the operations of three anonymous companies operating in the same service sector industry. Supply the missing data in the table below:
Â
|
 |
 |
Company |
 |
|
A |
B |
C |
|
|
Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . |
$400,000 |
$750,000 |
$600,000 |
|
Net operating income . . . . . . . . . . . . . . |
$Â Â Â ? |
$ 45,000 |
$Â Â Â Â ? |
|
Average operating assets . . . . . . . . . . . |
$160,000 |
? |
$150,000 |
|
Return on investment (ROI) . . . . . . . . . . |
20% |
18% |
? |
|
Minimum required rate of return: |
 |
 |
 |
|
Percentage . . . . . . . . . . . . . . . . . . . . . |
15% |
? |
12% |
|
Dollar amount . . . . . . . . . . . . . . . . . . . |
$Â Â Â ? |
$ 50,000 |
$Â Â Â Â ? |
|
Residual income . . . . . . . . . . . . . . . . . . |
$Â Â Â ? |
$Â Â Â Â ? |
$Â Â 6,000 |
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