1 Data Table - The company is segmented into five divisions: Paint Stores (branded retail location), Consumer (paint sold through stores such as Sears, Home Depot, and Lowe's), Automotive (sales to auto manufacturers), International, and Administration. The following is selected hypothetical divisional information for the company's two largest divisions: Paint Stores and Consumer (in thousands of dollars). Total Assets Sales Operating Income Paint Stores ... $ 3,950,000 $ 553,000 Consumer $ 1,200,000 $ 180,000 $ 1,975,000 $ 1,600,000 Print Done Instructor-created question Question Help Big Kid Paints is a national paint manufacturer and retailer. Click the icon to view additional information.) Assume that management has specified a 18% target rate of return. Read the requirements negative RI. First enter the formula, then calculate the Rl for each division. (Enter the amount in thousands. Use parentheses or a minus sign for negative residual incomes.) Total assets Operating income 553000 RI Paint Stores 1975000 X X Target rate of return 28 %) = 11.25 %) = 0 Consumer 180000 1600000 0 Interpret your results and offer recommendations for any division with negative RI. Only the Paint Stores Division is meeting management's target rate of return. The Consumer Division should work on improving its capital turnover rate Improving this may help the division achieve positive residual income. Requirement 6. Removed by instructor Requirement 7. Describe some of the factors that management konsiders when setting its minimum target rate of SK tia return (1 Choose from any list or enter any number in the input fields and then click Check Answer All parts showing Clear All Check Answer 5 of 15 Instructor-created question Question Help Big Kid Paints is a national paint manufacturer and retailer. Click the icon to view additional information.) Assume that management has specified a 18% target rate of return. Read the requirements. Requirement 8. Explain why some firms prefer to use Rl rather than ROI for performance measurement. RI doos a better job of Requirement 9. Explain why budget versus actual performance reports are insufficient for evaluating the performance of investment centers. I Investment centers are responsible for Budget versus actual performance reports are insufficient because they do not measure Choose from any list or enter any number in the input fields and then click Check Answer. All parts showing Clear All