Search ools Help e Annanose Outloo Connect New tab Assignm

Search ools Help e, Annanose . Outloo.. ?Connect ? New tab Assignments Adams Corporation evaluates divisional m anagers based on Return on Investment (RoI and has prowided the operating results of the Nortnern st year. The Controter has asked you to compute the Rot and Reskusal inicome based on data from last year and iT if the dvision adds a new product tine Use the information included in the Excel simulato n and the Excel functions described below to complete the task Simuabon below. tin a blank cel, G 55+G6 wos entered, the formula would and the values from those cels and ourpus the result, or 10.00 im this exaniple r Cell Reference: Alows you to refer to data from another cell in the worksneet From the Excel was or 4 00 nis exampie Basic Moth functions: Allows you to use the baske miathn symtbols to perform mathematic plus sign to add mrus sign to subtract. lasterisk sgn to mtph and/lorward slash to drvidel. From the Excet Simulation a biank using the otther math synmcois the result woukd output an appropriate enswer for its furiction S function From the Excel Smulation al functions. You can use the following keys ce Alows you to refer to mumple cels ano auds alil the vatoes You can adkt indvedial ceb references or ranges to uttize this below, If in a bilank cetSUMGS G6.37) was entered, tihe tormula woukd ouitput the result of ackding - SUM function n this exampie siiay t in a clank cetll suMG5 Gh was entered, tne formura would outpur tie uaue f true vaue of haieel and specnc oonsiderähions néed to be mae weh usinig tris tunction it the entre equation if test is being used in the test concin vabe tru or vake aseagumerts then same sesilit lE tunction: ows of adoing thase cels, except they are exprested as a range In the tormula, and the jesult wnuid be 12 co i this exampe you to test a condition and return a specific value is the result is true and different value if the tesult es faise The syntax s an evaluation af the status of a cell such as it the vaue or a cell is arearer thet less tha or equst to anothier ase aiguments witl return any specinic resur tor each option. such as anothies cell reterence, numoes or cel. The value t troe and vsue text nset should be entored ri qwothtions so that Excel will recognize the text as d sting of text instedd of another fuanction From the ce. Simulator below. Inn a blank en . ?ris10-2o,total coal IS Hg,Total cost is low was ereea te istinga semenput the of the vaiue M true since the rest conor woulc be iesult as true, or in ths cose the text \"Total cost is nigh. Exce processes the n unction by separatng it out into separate pans Flrst the rest conomon Excel trinks, d cet to and cetermone it che valie is greos 1of 3 Next > e here to search

Solution

1) ROI = net income / Average operating assets = 1995000/9500000=21% 2)ROI of new product line Net income =1995,000+400,000= $2395000 Average operating assets = 9500000+2,500,000= $12000000 ROI = 2395000/12000000= 19.96% 3) it will reject the new product line as there is decrease in ROI IF(E23>E21,\"ACCEPT\",\"REJECT\") 4)Residual income = net income - (Average operating assets*minimum rate of return) = 1995000 - (9500000*15%)= $570000 5) Residual income = 2395000 - (12000000*15%)= $595000