Purchase Solution

Performance Evaluation, Residual Income: Williamson Group

Not what you're looking for?

Ask Custom Question

Williamson Group operates a chain of bookstores. A recent business expansion plan resulted in the opening of more than 25 new stores. The Upland store has one more feature that the Stowe store does not have-a small coffe shop. Early indications are that the coffee shop has driven up the location's revenues and profits. Operating data for two of these stores is provided below:
Upland Stowe
ROI 18.75% 14.0%
Net operating income ? ?
Minimum required return 15% 15%
Average operating assets $200,000 $150,000
Residual income ? ?

A) Calculate net operating income and residual income for each division.
B) Compare the two divisions and discuss the usefulness of ROI and residual income for the purpose of comparing the divisions.

Purchase this Solution

Solution Summary

Your tutorial walks you through the process of "solving" for the missing amounts in Excel (attached). Click in cells to see computations. A comparison is made and the pros and cons of each measure of given.

Solution provided by:
Education
  • BSc, University of Virginia
  • MSc, University of Virginia
  • PhD, Georgia State University
Recent Feedback
  • "hey just wanted to know if you used 0% for the risk free rate and if you didn't if you could adjust it please and thank you "
  • "Thank, this is more clear to me now."
  • "Awesome job! "
  • "ty"
  • "Great Analysis, thank you so much"
Purchase this Solution


Free BrainMass Quizzes
Income Streams

In our ever changing world, developing secondary income streams is becoming more important. This quiz provides a brief overview of income sources.

Employee Orientation

Test your knowledge of employee orientation with this fun and informative quiz. This quiz is meant for beginner and advanced students as well as professionals already working in the HR field.

Marketing Management Philosophies Quiz

A test on how well a student understands the basic assumptions of marketers on buyers that will form a basis of their marketing strategies.

Writing Business Plans

This quiz will test your understanding of how to write good business plans, the usual components of a good plan, purposes, terms, and writing style tips.

Managing the Older Worker

This quiz will let you know some of the basics of dealing with older workers. This is increasingly important for managers and human resource workers as many countries are facing an increase in older people in the workforce