Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Accounting Basics Expert

Q1) Innovative Furnishing Solutions (IFS), division of Steelman Corporation buys and installs modular office components. For the most recent year, division had the following performance targets:

Asset turnover 2.5
Profit margin 6%
Target rate of return on investments for RI 13%
Cost of capital 10%
Income tax rate 40%

Actual information concerning company's performance for last year follows:

Total assets at beginning of year $3,600,000
Total assets at end of year 5,300,000
Total invested capital (annual average) 8,000,000
Sales 9,000,000
Variable operating costs 3,650,000
Direct fixed costs 4,770,000
Allocated fixed costs 675,000

problems:

a. For IFS, find out segment margin and average assets for the year.

b. Based on segment margin and average assets, find out profit margin, asset turnover and ROI.

c. Estimate ROI performance of IFS.

d. Using your answer from part b., find out residual income of IFS.

e. find out EVA of IFS. Why are EVA and RI levels different?

f. Based on data given in the problem, describe why ROI, EVA and RI may be inappropriate measures of performance for IFS.

Accounting Basics, Accounting

  • Category:- Accounting Basics
  • Reference No.:- M919670

Have any Question? 


Related Questions in Accounting Basics

Expl principles of accountingdepartment Expl Principles of Accounting Department

Expl Principles of Accounting Department Responsibility • Why should responsibility for related transactions be divided among different departments or individuals? Do you agree the transactions should be divided? Why or ...

Question 1with respect to transferability of ownership

Question 1 With respect to transferability of ownership interests, a sole proprietor may: not transfer her interests may only transfer her interest with approval of the state freely transfer her interests transfer her in ...

Internal control procedures are required for all

Internal control procedures are required for all transaction cycles within an accounting cycle. This week you are addressing the control procedures that would be the most effective in the general ledger and reporting sys ...

Accounting assignmentcolorado springs company csc is a

Accounting Assignment Colorado Springs Company (CSC) is a wholesaler with fiscal year ended December 31 of previous year. Since it is publicly-traded, it undergoes external audit. The most recent audit was completed in F ...

Auditing and ethical practice and auditing and ethics

Auditing and Ethical Practice and Auditing and Ethics Assessment Task The object of this assignment is to assist students to develop critical analysis skills in relation to auditor independence and issues in accepting au ...

Forwards and options respond to each of the following

Forwards and Options Respond to each of the following questions (notice that there are main questions and sub-questions below some of the main questions - don't miss any!) 1. Suppose you enter into a long 6-month forward ...

Module 1 1 page topic selectionselect any topic in

Module 1 ( 1 Page ) Topic Selection Select any topic in accounting of interest that connects to the subject matter of this course. If you have already selected the area of your doctoral research, you may choose a topic i ...

Problem 3-2 lo 2 simple equity method adjustments

Problem 3-2 (LO 2) Simple equity method adjustments, consolidated worksheet. On January 1, 2015, Paro Company purchases 80% of the common stock of Solar Company for $320,000. Solar has common stock, other paid-in capital ...

Assessment cloud on-line accounting and systems

Assessment: Cloud On-line Accounting and Systems Documentation You are working as an accountant in an accounting firm. You have been approached by the owner of "Splash!" a start-up business that sells swimming accessorie ...

Accountingbulluse the internet to research an annual report

Accounting • Use the Internet to research an annual report of a retail company. • Then, imagine you are an investor or creditor; suggest the ratios that you believe would provide an investor or creditor with the most imp ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

WalMart Identification of theory and critical discussion

Drawing on the prescribed text and/or relevant academic literature, produce a paper which discusses the nature of group

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro