=+The B division had sales in the last year of 15m. If both divisions are retained and

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=+The B division had sales in the last year of £15m.

If both divisions are retained and a new product differentiation strategy is attempted then the following Rappaport value drivers will apply:

Sales 18%
Operating profit margin before tax 12%
Tax rate 31%
Incremental fixed capital investment (IFCI)
15%
Incremental working capital investment (IWCI)
9%
Planning horizon 5 years Required rate of return 17%
4º a

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