Antique Corp uses the investment center concept for the museums that it manages.Selected operating data for three of its museums for 2015 are as follows:
$$\begin{array} { | l | r | r | r | }
\hline & { \text { Ohio } } & { \text { Dallas } } & { \text { Texas } } \
\hline \text { Revenue } & \$ 1,200,000 & \$ 1,500,000 & \$ 1,800,000 \
\hline \text { Operating assets } & 700,000 & 500,000 & 600,000 \
\hline \text { Net operating income } & 105,000 & 115,000 & 120,000 \
\hline
\end{array}$$ Required:
a.Compute the return on investment for each division.
b.Which museum manager is doing best based only on ROI? Why?
c.What other factors should be included when evaluating the managers?

Question

Antique Corp uses the investment center concept for the museums that it manages.Selected operating data for three of its museums for 2015 are as follows:
 $$\begin{array} { | l | r | r | r | } 
\hline &  { \text { Ohio } } & { \text { Dallas } } & { \text { Texas } } \
\hline \text { Revenue } & \$ 1,200,000 & \$ 1,500,000 & \$ 1,800,000 \
\hline \text { Operating assets } & 700,000 & 500,000 & 600,000 \
\hline \text { Net operating income } & 105,000 & 115,000 & 120,000 \
\hline
\end{array}$$ Required:
a.Compute the return on investment for each division.
b.Which museum manager is doing best based only on ROI? Why?
c.What other factors should be included when evaluating the managers?

Quizplus · Accepted Answer

The Answer of Antique Corp uses the investment center concept for the museums that it manages.Selected operating data for three of its museums for 2015 are as follows:
 $$\begin{array} { | l | r | r | r | } 
\hline &  { \text { Ohio } } & { \text { Dallas } } & { \text { Texas } } \
\hline \text { Revenue } & \$ 1,200,000 & \$ 1,500,000 & \$ 1,800,000 \
\hline \text { Operating assets } & 700,000 & 500,000 & 600,000 \
\hline \text { Net operating income } & 105,000 & 115,000 & 120,000 \
\hline
\end{array}$$ Required:
a.Compute the return on investment for each division.
b.Which museum manager is doing best based only on ROI? Why?
c.What other factors should be included when evaluating the managers?

Antique Corp Uses the Investment Center Concept for the Museums