Exam 12: Performance Evaluation and the Balanced Scorecard

Assume the Apple division of the Gala Company had the following results last year (in thousands). Managements required rate of return is 10% and the weighted average cost of capital is 8%. Its effective tax rate is 30%. - What is Apple division's capital turnover?

Norwood Company has a return on investment of 10%, operating income of $200,000, and a capital Turnover of 4.0. How much were Norwood's sales?

Herb Corporation has provided the following information: - What is Herb Corporation's residual income?

Waddington Corporation currently has a return on investment of 12%. The Madrid division is Reporting residual income of $1,000,000 and a 14% return on investment. The Madrid division is Contemplating an investment opportunity which has an 11% return on investment and a positive Residual income. Should Madrid division's management make the investment if goal congruence is Important to the Waddington Corporation?

Assume the Apple division of the Gala Company had the following results last year (in thousands). Managements required rate of return is 10% and the weighted average cost of capital is 8%. Its effective tax rate is 30%. - What is Apple division's residual income?

The Gnome Company has provided the following information: -What was Gnome's weighted average cost of capital?

Norwood Company has a return on investment of 10%, operating income of $200,000, and a capital Turnover of 4.0. How much were Norwood's total assets?

Madrid Company has a return on investment of 12.5%, sales of $4,000,000, and a profit margin of 5%. How much were Madrid's total assets?

Hancock Corporation has a capital turnover of 2, sales of $500,000, and a return on investment of 4%. What was Hancock's operating income??

Assume division 1 of the XYZ Company had the following results last year (in thousands). Management's required rate of return is 8% and the weighted average cost of capital is 6%. Its effective tax rate is 30%. -What is the division's return on investment?

Assume the Apple division of the Gala Company had the following results last year (in thousands). Managements required rate of return is 10% and the weighted average cost of capital is 8%. Its effective tax rate is 30%. What is Apple division's return on investment?

Assume division 1 of the XYZ Company had the following results last year (in thousands). Management's required rate of return is 8% and the weighted average cost of capital is 6%. Its effective tax rate is 30%. - What is the division's capital turnover?

Assume division 1 of the XYZ Company had the following results last year (in thousands). Management's required rate of return is 8% and the weighted average cost of capital is 6%. Its effective tax rate is 30%. - What is the division's residual income?

Canton Corporation currently has a return on investment of 14%. The Potsdam division is Reporting residual income of $500,000 and a 12% return on investment. The Potsdam division is Contemplating an investment opportunity which has a 13% return on investment and a positive Residual income. Should Potsdam division's management make the investment if goal congruence is Important to the Canton Corporation?

Assume division 1 of the XYZ Company had the following results last year (in thousands). Management's required rate of return is 8% and the weighted average cost of capital is 6%. Its effective tax rate is 30%. - What is the division's economic value added?

Assume the Apple division of the Gala Company had the following results last year (in thousands). Managements required rate of return is 10% and the weighted average cost of capital is 8%. Its effective tax rate is 30%. -What is Apple division's profit margin?

Herb Corporation has provided the following information: -What is Herb Corporation's economic value added?

The management of Mullen Division has provided the following information: Operating assets: $600,000 Operating income: $90,000 Sales: $300,000 Management is considering investing in an additional project costing $60,000; it is estimated that the project will create operating income of $7,200. Mullen's minimum desired rate of return is 10%. Should Mullen's management invest in the project if management is evaluated using residual income?