Posted: February 5th, 2019
Accounting 202 Quiz 5 Spring 2013
Accounting
202
Spring
2013
Name____________________________________
1. Operating Average
Sales Income Assets
ROI Margin Turnover
Case
1 $326,000 (a) $407,500 12% (b) (c)
Case
2 (d) $60,000 (e) (f) 12.5% .64
Calculate
the missing numbers for each case independently. Each letter is worth 1 point.
2. Current data for two investment centers at
North Pole Inc. are presented below.
Hermey Buddy
Sales $550,000 $925,000
Operating income $118,000 $152,000
Average assets $690,000 $1,250,000
Santa Claus has developed a
new toy that he would like to begin producing.
The budget for the new toy reflects sales of $320,000; total expenses of
$281,000; and required average assets of $280,000. Which of the following is true if Santa sets
the minimum rate of return at 13%? 4
points
Neither
Hermey nor Buddy will want the new toy if they are evaluated using return
on investment.
Neither
Hermey nor Buddy will want the new toy if they are evaluated using
residual income.
Hermey
would want the new toy but Buddy would not if they are evaluated using
return on investment.
Both Hermey
and Buddy would want the new toy if they are evaluated using residual
income.
