Three divisions of Jameson Co. report the following sales and operating data: Athletic Wear Fitness Training...
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Three divisions of Jameson Co. report the following sales and operating data: Athletic Wear Fitness Training Spa Services Sales $670,000 $920,000 $600,000 Average operating assets $134,000 $184,000 $120,000 Operating income $ 33,500 $ 46,000 $ 36,000 Minimum required rate of return 148 16% 148 Required: 1. Compute the ROI for each division, using the formula stated in terms of margin and turnover. ROI Fitness training Spa services % % Athletic wear % 2. Compute the residual income for each division. Fitness Training Spa Services Athletic Wear Residual income a. If performance is being measured by ROI, which division or divisions will probably accept the opportunity? Fitness Training Spa Services Athletic Wear b. If performance is being measured by residual income, which division or divisions will probably accept the opportunity? Fitness Training Spa Services Athletic Wear Three divisions of Jameson Co. report the following sales and operating data: Athletic Wear Fitness Training Spa Services Sales $670,000 $920,000 $600,000 Average operating assets $134,000 $184,000 $120,000 Operating income $ 33,500 $ 46,000 $ 36,000 Minimum required rate of return 148 16% 148 Required: 1. Compute the ROI for each division, using the formula stated in terms of margin and turnover. ROI Fitness training Spa services % % Athletic wear % 2. Compute the residual income for each division. Fitness Training Spa Services Athletic Wear Residual income a. If performance is being measured by ROI, which division or divisions will probably accept the opportunity? Fitness Training Spa Services Athletic Wear b. If performance is being measured by residual income, which division or divisions will probably accept the opportunity? Fitness Training Spa Services Athletic Wear
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