Bark and Bliss Limited is a pet supply company headquartered in Edmonton, Alberta. They have four different lines of business. Here is an excerpt of their financial statements for the December 31, 2020 fiscal year: Dog Walking Brick & Division Online Shop Pet Training & Pet Care Mortar Stores Sales $4 22,500,000 13,980,000 27,630,500 5,407,000 Net operating income $4 1,250,000 1,840,000 2,845,200 1,134,750 Average operating assets $4 7,580,000 8,275,000 14,500,000 5,250,000 Bark and Bliss Limited has a policy that all investments must have a rate of return of at least 15%. Required: a. What is the return on investment for each of Bark and Bliss' four lines of business? Round your calculations to one decimal place, b. If the Online Store division was able to reduce its operating expenses by $57,000, what would be its new return on investment? c. What is the residual income for each of Bark and Bliss' four lines of businessà

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Bark and Bliss Limited is a pet supply company headquartered in Edmonton, Alberta. They have four different lines
of business. Here is an excerpt of their financial statements for the December 31, 2020 fiscal
year:
Dog Walking
Brick &
Division
Online Shop
Pet Training
& Pet Care
Mortar Stores
Sales
$1
22,500,000
13,980,000
27,630,500
5,407,000
Net operating income
$4
1,250,000
1,840,000
2,845,200
1,134,750
Average operating assets
$1
7,580,000
8,275,000
14,500,000
5,250,000
Bark and Bliss Limited has a policy that all investments must have a rate of return of at least
15%.
Required:
a. What is the return on investment for each of Bark and Bliss' four lines of business? Round your calculations to
one decimal place,
b. If the Online Store division was able to reduce its operating expenses by $57,000, what would be its new return
on investment?
Acti
c. What is the residual income for each of Bark and Bliss' four lines of businessa
Go to
Transcribed Image Text:Bark and Bliss Limited is a pet supply company headquartered in Edmonton, Alberta. They have four different lines of business. Here is an excerpt of their financial statements for the December 31, 2020 fiscal year: Dog Walking Brick & Division Online Shop Pet Training & Pet Care Mortar Stores Sales $1 22,500,000 13,980,000 27,630,500 5,407,000 Net operating income $4 1,250,000 1,840,000 2,845,200 1,134,750 Average operating assets $1 7,580,000 8,275,000 14,500,000 5,250,000 Bark and Bliss Limited has a policy that all investments must have a rate of return of at least 15%. Required: a. What is the return on investment for each of Bark and Bliss' four lines of business? Round your calculations to one decimal place, b. If the Online Store division was able to reduce its operating expenses by $57,000, what would be its new return on investment? Acti c. What is the residual income for each of Bark and Bliss' four lines of businessa Go to
Final Exam - Google Chrome
ca/mod/quiz/attempt.php?attempt=D990938&cmid 1259243&page%=3
TRU Moodle
Bark and Bliss Limited has a policy that all investments must have a rate of return of at least
15%.
Required:
a. What is the return on investment for each of Bark and Bliss' four lines of business? Round your calculations to
one decimal plac -
b. If the Online Store division was able to reduce its operating expenses by $57,000, what would be its new return
on investment?
c. What is the residual income for each of Bark and Bliss' four lines of business?.
d. If each line of business was offered an investment opportunity with an 18 % ROI, which lines of business would
be MOST and LEAST likely to accept or reject the investment? Provide a brief explanation to support your decision.
i-
B
!!
X2
x2
Fr
T:
</>
#3
Ac
Transcribed Image Text:Final Exam - Google Chrome ca/mod/quiz/attempt.php?attempt=D990938&cmid 1259243&page%=3 TRU Moodle Bark and Bliss Limited has a policy that all investments must have a rate of return of at least 15%. Required: a. What is the return on investment for each of Bark and Bliss' four lines of business? Round your calculations to one decimal plac - b. If the Online Store division was able to reduce its operating expenses by $57,000, what would be its new return on investment? c. What is the residual income for each of Bark and Bliss' four lines of business?. d. If each line of business was offered an investment opportunity with an 18 % ROI, which lines of business would be MOST and LEAST likely to accept or reject the investment? Provide a brief explanation to support your decision. i- B !! X2 x2 Fr T: </> #3 Ac
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