Question

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: (Loss amounts should be indicated by a minus sign. Round your percentage answers to nearest whole percent and other amounts to whole dollars.)

	Company A B C Sales $380,000 $790,000 $550,000 Net operating income $47,000 Average operating assets $169,000 $150,000 Return on investment (ROI) 24 % 19 % % Minimum required rate of return: Percentage 17 % % 14 % Dollar amount $50,000 Residual income $5,000

Answer 1

	A	B	C
Sales	$380,000	$790,000	$550,000
Net operating income	40,560 (169,000*24%)	47,000	26,000 (21,000+5,000)
Average operating assets	169,000	247,368 (47,000/19%)	150,000
Return on investment (ROI)	24%	19%	17% (26,000/150,000*100%)
Minimum required rate of return:
Percentage	17%	20% (50,000/247,368*100)	14%
Dollar amount	28,730 (169,000*17%)	50,000	21,000 (150,000*14%)
Residual income	$11,830 (40,560-28,730)	-$3,000 (47,000-50,000)	$5,000