Return on Investment, Residual Income for a Service Company H&R Block Inc. provides tax preparation services throughout the United States and other parts of the world. These services are provided...


Return on Investment, Residual Income for a Service Company


H&R Block Inc. provides tax preparation services throughout the United States and other parts of the world. These services are provided through two segments: company-owned offices and franchised operations.


Recent financial information provided by H&R Block for its company-owned and franchised operations is as follows (in millions):









































Company-Owned



Franchised Operations
Revenues$2,651$ 335
Income from operations61786
Total assets3,930586


a.Use the DuPont formula to determine the return on investment for each business divisions. Round whole percents to one decimal place and investment turnover to two decimal places.


















Division

Return on Investment
Company-Ownedfill in the blank 1%
Franchised Operationsfill in the blank 2%


b.Determine the residual income for each division, assuming a minimum acceptable income of 15% of total assets. Round minimal acceptable return to the nearest million dollars.


















Division

Residual income
Company-Owned$fill in the blank 3millions
Franchised Operations$fill in the blank 4millions


c.The Franchised Operations (FO) segment has the   return on investment, which is mainly the result of a   investment turnover.



Jun 09, 2022
SOLUTION.PDF

Get Answer To This Question

Related Questions & Answers

More Questions »

Submit New Assignment

Copy and Paste Your Assignment Here