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The Following Information Pertains to the Three Divisions of Zorro

question 122

Multiple Choice

The following information pertains to the three divisions of Zorro Company:  Division A  Division B  Division C  Sales ??1,250,000 Net operating income $40,000$25,000$75,000 Average operating assets 400,000?? Return on investment ?20%15% Margin 0.100.05? Turnover 1.2?? Target ROI 14%12%10%\begin{array}{lrrr} & \text { Division A } & \text { Division B } & \text { Division C } \\\text { Sales } & ? & ? & 1,250,000 \\\text { Net operating income } & \$ 40,000 & \$ 25,000 & \$ 75,000\\\text { Average operating assets } & 400,000 & ? & ? \\\text { Return on investment } & ? & 20 \% & 15 \% \\\text { Margin } & 0.10 & 0.05 & ?\\\text { Turnover } & 1.2 & ? & ? \\\text { Target ROI } & 14 \% & 12 \% & 10 \%\end{array} What is the residual income for Division A?

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Definitions:

Foreign Currencies

Money or other forms of legal tender issued by countries other than one's own, used in international trade and finance transactions.

U.S. Exports

Goods and services produced in the United States and sold to other countries, contributing to the national economy.

Dollar-Euro Market

The foreign exchange market where the US dollar and the Euro are traded against each other.

Increased Demand

A situation where consumers are willing and able to purchase more of a good or service at each price level, leading to a shift rightward of the demand curve.

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