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5. 10-29 Simple ROI and Economic Profit Calculations Consider the following data: X Division Y Invested capital $1,050,000 $ Z $1,200,000 Income S $
5. 10-29 Simple ROI and Economic Profit Calculations Consider the following data: X Division Y Invested capital $1,050,000 $ Z $1,200,000 Income S $ 142,800 $ 210,000 Revenue $2,310,000 $2,856,000 $ Return on sales 3% Capital turnover Rate of return on invested capital 1. Prepare a similar tabular presentation, filling in all blanks. 10.5% 2. Suppose each division is assessed a capital charge based on a cost of capital of 10% of invested capital. Compute the economic profit for each division.
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