Presented below is selected information for three regional divisions of Medina Company. Divisions
North South West
Contribution margins $300,000 $500,000 $400,000
Controllable margin $140,000 $360,000 $210,000
Average operating assets $1,000,000 $2,000,000 $1,500,000
Minimum rate of return 13% 16% 10%
A) Compute the return on investment for each division
B) Compute the residual income for each division
C) Assume that each division has an investment opportunity that would provide a rate of return of 16%
1. If ROI is used to measure performance, which division or divisions will probably make the additional investment?
2. If residual income is used to measure performances, which division or divisions will probably make the additional investment?

At the end of the year, blossom co. has pretax financial income of $561,000. included in the $561,000 is $73,000 interest income on municipal bonds, $25,000 fine for dumping hazardous waste, and depreciation of $64,400. depreciation for tax purposes is $48,300. compute income taxes payable, assuming the tax rate is 30% for all periods.

Which of the following statements is true? a. financial investment refers to the creation and expansion of business enterprisesb. economic investment refers to the creation and expansion of business enterprisesc. economic investment refers to the purchase of assets such as stocks, bonds, and real estated. both economic and financial investment refer to the purchase of assets such as stocks, bonds, and real estate

You and your new australian bride matilda, are applying for a loan and are required to submit a balance sheet with your net worth. you own a 2008 toyota camry that you bought last month for $9,995. the kelly blue book value for this car is $13,995. you owe $8,150 on the car loan for the camry. you pay off your visa credit card every month and have not paid any credit card interest this year. the current visa credit card balance is $3,522, and the next statement is due in 15 days. you have a student loan balance of $6,500. you presently have $425 in your checking account and $1,540 in your savings account. you own 100 shares of ibm stock that you purchased for $85.50 per share. one share of ibm is now selling for $158.42. you own computers and other electronics that you purchased for $4,100 but could probably sell today on e-bay for $1,800. your gross income is $80,000 per year. what is your current net worth? (see wb ch. 2 example 2.3)