A farm equipment company, with three divisions, shows the following results for 2011: The companys desired rate

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A farm equipment company, with three divisions, shows the following results for 2011:

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The company’s desired rate of return is 15%.

a. Compute each division's ROI.

b. Compute each division's residual income.

c. Rank each division by both ROI and residual income.

d. Which division had the best performance in 2001? Why?

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Accounting For Managers Interpreting Accounting Information For Decision Making

ISBN: 9781118037966

1st Canadian Edition

Authors: Paul M. Collier, Sandy M. Kizan, Eckhard Schumann

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Question Posted: May 31, 2024 03:08 AM

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A farm equipment company, with three divisions, shows the following results for 2011: The companys desired rate

Question:

Sales Contribution margin Operating income Investment base Tractor Division $ 8,000,000 2,000,000 Mower Division Harvester Division $9,000,000 $10,000,000 2,500,000 3,500,000 1,500,000 1,500,000 2,750,000 12,000,000 14,000,000 16,000,000

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Accounting For Managers Interpreting Accounting Information For Decision Making

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