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##### Accounting 202 Quiz 5 Spring 2013

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Question;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.

Paper#39101 | Written in 18-Jul-2015

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