10-6

Luke Company has three divisions: Peak, View, and Grand. The company has a hurdle rate of 5.26 percent. Selected operating data for the three divisions follow: $ Sales revenue Cost of goods sold Miscellaneous operating expenses Average invested assets Peak View Grand 336,000 $ 239,000 $ 313,000 212,000 110,000 197,000 37,000 34,000 38,000 1,350,000 910,000 1,195,000 Required: 1. Compute the return on investment for each division. 2. Compute the residual income for each division. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the return on investment for each division. (Enter your ROI answers as a percentage rounded to two decimal places, (i.e., 0.1234 should be entered as 12.34%.)) Peak View Grand Return on Investment % % Required 1 Required 2 Compute the residual income for each division. (Loss amounts should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to nearest whole dollar.) Peak View Grand Residual Income (Loss)