Exercise 9 8 Return on Investment (ROI) and Residual Income Relations [LO1, LO2]
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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: (Negative amounts should be indicated with a minus sign. Do not round immediate calculations, but round your final answers to the nearest whole number.) |
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Company |
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| A | B | C | ||
| Sales | $ 340,000 | $ 720,000 | $ 670,000 | |
| Net operating income | $ | $ 37,000 | $ | |
| Average operating assets | $ 163,000 | $ | $ 145,000 | |
| Return on investment (ROI) | 25% | 19% | % | |
| Minimum required rate of return: | ||||
| Percentage | 15% | % | 9% | |
| Dollar amount | $ | $ 54,000 | $ | |
| Residual income | $ | $ | $ 5,000 | |
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