Accounting The current controllable margin for Henry Division is $93000. Its current operating assets are $300000. The division is considering purchasing equipment for $90000 that will increase annual controllable margin by an estimated $12000. If the equipment is purchased, what will happen to the return on investment for Henry Division?
- A decrease of 7.1%
- A decrease of 12.1%
- An increase of 12.9%
- A decrease of 4.1%
| I keep getting 17.43% and then subtract 21% and my answers are not matching any of the above. |
The following information is available for Halle Department Stores:
| Average operating assets |
$700,000 |
| Controllable margin |
68,000 |
| Contribution margin |
190,000 |
| Minimum rate of return |
8% |
How much is Halle’s residual income?
- $12000
- $134000
- $632000
- $56000.
