Ask Question, Ask an Expert


Ask Accounting Basics Expert

New Orleans, Inc., is a multidivision company. The current ROI for New Orleans, Inc., as a whole is 12%. New Orleans Inc. has a minimum required rate of return on all investments of 10%. The most successful division within New Orleans Inc. is the Shellfish Division. Currently the Shellfish Division has total assets of $4,000,000 with operating income of $800,000. The manager of the Shellfish Division is considering the purchase of a small company called Shrimp, Inc. The purchase of Shrimp Inc. will require an investment of $800,000, and the synergy between the two companies will increase Shellfish Division's operating income by $80,000. Bonuses in all of New Orleans divisions are awarded to managers with increasing ROIs.

a. What is the ROI for the Shellfish Division, before and after the proposed purchase of Shrimp Inc.?

b. What is the residual income for the Shellfish Division, before and after the purchase of Shrimp Inc.?

Accounting Basics, Accounting

  • Category:- Accounting Basics
  • Reference No.:- M947165

Have any Question? 

Related Questions in Accounting Basics

Introductory accounting assignment question 1 - the

INTRODUCTORY ACCOUNTING ASSIGNMENT QUESTION 1 - The information given below was extracted from the books of KAISER TRADERS. REQUIRED: 1.1: Compare the Bank Statement with the Cash Receipts Journal and Cash Payments Journ ...

Problem 1pringle corporation has been authorized to issue

Problem 1: Pringle Corporation has been authorized to issue 23,300 shares of $100 par value, 8%, noncumulative preferred stock and 1,007,600 shares of no-par common stock. The corporation assigned a $4 stated value to th ...

The following data relate to the operations of shilow

The following data relate to the operations of Shilow Company, a wholesale distributor of consumer goods: Current assets as of March 31:        Cash $8,000        Accounts receivable $20,000        Inventory $36,000      ...

Problem 1emma and laine form the equal el partnership emma

PROBLEM #1 Emma and Laine form the equal EL Partnership. Emma contributes cash of $100,000. Laine contributes property with an adjusted basis of $40,000 and a fair market value of $100,000. A. How much gain. If any, must ...

Assignmenttravel-r-us inc travel is a publicly-traded

Assignment Travel-R-Us, Inc. (Travel) is a publicly-traded company with annual revenue of $370 million and a fiscal year ending May 31. Travel owns and operates three cruise ships serving Alaska, the Mediterranean, and t ...

You are the auditor for a company and need to review the

You are the auditor for a company and need to review the company's accounts receivable using probability proportional to size (PPS) sampling. In addition, the board of directors has requested that you and your team prese ...

In this assignment you will use the internet and other

In this assignment, you will use the Internet and other sources to gather and interpret information related to service and manufacturing organizations. Select either a service or a manufacturing organization of interest ...

The purpose of this comprehensive project is to use a

The purpose of this comprehensive project is to use a variety of resources to research a corporation. You will also prepare a written paper describing your corporation and summarizing the findings you have developed in t ...

Accounting questionfollowing the completion of the

Accounting Question: Following the completion of the investigation of a potential fraud case, you are informed by your manager that the case will be brought to trial. As part of the litigation process you will be asked t ...

International accounting1 when discussing foreign currency

International Accounting 1. When discussing foreign currency exchange, there are several arrangements. List two of these. 2. A _________ is a contract between two or more parties. 3. What are the timelines for the new re ...

  • 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