Ohio Pipe Fitting Corporation has two divisions to which the following data pertain. The companys Missing Data;
Question:
Ohio Pipe Fitting Corporation has two divisions to which the following data pertain. The company’s Missing Data; Improving RO] Tequired rate of return on invested capital is 8 percent.
(LO 5,6) Dayton Cincinnati Division Division SalSSifEVOMUC ss ccvsonsnesns decree nee $10,000,000 ?
iaYeia) igXcw ma ctercerre SROMCTTE ot eos 6c. $ 2,000,000 $400,000 AVErage INVEStMENL........cccececeeeneees $ 2,500,000 2 SYETIEISIAMELION Mscenocdocoeescoapbe aneesoenoconndcasc ? 20%
Cap italhtunmovelingencen....ccrnceceers : ? 1 FRO)| Ea erOOSr, cs ceree ent orA N 2? a RESIGUEIIMCOME...5.::.004:..eeenemeen: e ?
Required
a. Supply answers for the question marks in the preceding table.
b. Explain three ways the Dayton Division manager could improve her division’s ROI. Use numbers to illustrate these possibilities.
c. Suppose the Cincinnati Division’s sales margin increased to 25 percent while its capital turnover remained constant. Compute the division’s new ROI.
Step by Step Answer:
Cost Management Strategies For Business Decisions
ISBN: 12
4th Edition
Authors: Ronald Hilton, Michael Maher, Frank Selto