1

Escuda Company has the following information available for the past year: The company's hurdle rate is 12 percent. Required: 1. Calculate Escuda's return on investment (ROI) and residual income for each division for last year. 2. Recalculate Escuda's ROI and residual income for both divisions for the independent situation that follows: a. Net operating income increases by 10 percent. b. Net operating income decreases by 10 percent. c. The company invests $400.000 in each division, an amount that generates $80.000 additional income per division. d. Escuda changes its hurdle rate to 9 percent. Complete this question by entering your answers in the tabs below. Calculate Escuda's retum on investment (ROI) and residual income for each divislon for iast year. Note: Enter your ROI answers as a percentage rounded to two decimal places, (I,e., 0.1234 should be entered as 12,34\%.). Loss amounts should be indicated with a minus sign