Reference no: EM131090797
Key information for the Plant City Division (PCD) of Barkley Industries for 2014 are as follows:
Revenues $15,000,000
Operating Income 1,800,000
Total Assets 10,000,000
PCD managers are evaluated and rewarded on the basis of ROI defined as operating income divided by total assets. Barkley Industries expects its divisions to increase ROI each year.Next year, 2015, appears to be a difficult year for PCD. PCD had planned a new investment to improve quality but, in view of poor economic conditions, has postponed the investment. ROI for 2015 was certain to decrease if PD had made the investment.
Management is now considering ways to meet its target ROI of 20% for next year. It anticipates revenues to be steady at $15 million in 2015.
Required:
(a) Calculate PCD's return on sales and ROI for 2014.
(b) (1) By how much would PCD need to cut costs in 2015 to achieve its target ROI of 20%, assuming no change in total assets between 2014 and 2015?
(b)(2) By how much would PCD need to decrease total assets in 2015 to achieve its target ROI of 20%, assuming no change in operating income between 2014 and 2015?
(c) Calculate PCD's Residual Income (RI)* in 2014, assuming a required rate of return on investment of 15%.
(d) PCD wants to increase RI by 50% in 2015. Assuming it could cut costs by $45,000 in 2015, by how much would PCD need to decrease total assets in 2015?
(e) Barkley Industries is concerned that the focus on cost cutting, asset sales and no new investments will have an adverse long-run effect on PCD's customers. Yet Barkley wants PCD to meet its financial goals. What other measurements, if any do you recommend that Barkley use?Explain briefly.
|
Odds of being dealt two pairs
: The probability of being dealt two pairs in a five card poker hand is 0.0475. What are the odds of being dealt two pairs? Three fair coins are flipped. Outcomes in the sample space are represented by strings such as HHT, HTH, and TTT.
|
|
Design a main program to test the functionality
: Implement 16-bit unsigned arithmetic. Design a main program to test the functionality of your solution. Measure the execution speed and required stack space of both versions for five different input values. Generalize the results.
|
|
Reaction at the ground
: Given that the beam has length 10m and mass of 175kg, determine a) the tension in the cable and b) the reaction at the ground. Please show working out.
|
|
Interest rate on deposits
: If they can load all the money they take in at 10% interest, what interest rate on deposits will generate the best profit
|
|
Calculate pcd return on sales
: PCD managers are evaluated and rewarded on the basis of ROI defined as operating income divided by total assets. Barkley Industries expects its divisions to increase ROI each year.
|
|
A dissertation on a critical appraisal of npt
: A Dissertation on A CRITICAL APPRAISAL OF NPT: TRENDS AND CHALLENGES Abstract:-The international community today is faced with the dilemma of nuclear proliferation. It has proved to be the gravest challenge for mankind for its catastrophic nature h..
|
|
Analyzing from the bureau of labor statistics
: G310 Advanced Analytics and Statistics - Course Project Option 1The data set consists of 364 records that you will be analyzing from the Bureau of Labor Statistics.
|
|
The application of statistical and decision making technique
: A health agency is taking a survey regarding the evaluation of all the hospitals in Melbourne to find out the statistical calculation and analyze the attributes of the data. The agency needs a report that can analyze the number of admissions, type of..
|
|
List the devices that can drive the address bus
: List the devices that can drive the address bus during a CPU read cycle.
|