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5. Please complete all parts: Luke Company has three divisions: Peak, View, and Grand. The company has a hurdle rate of 5.76 percent. Selected operating
5. Please complete all parts:
Luke Company has three divisions: Peak, View, and Grand. The company has a hurdle rate of 5.76 percent. Selected operating data for the three divisions follow: Sales revenue Cost of goods sold. Miscellaneous operating expenses Average invested assets 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. Return on Investment %6 Peak $ 326,000 197,000 37,000 1,240,000 Required 1 Required 2 Compute the return on investment for each division. Note: Enter your ROI answers as a percentage rounded to two decimal places, (i.e., 0.1234 should be entered as 12.34%.) Peak View 96 Luke Company has three divisions: Peak, View, and Grand. The company has a hurdle rate of 5.76 percent. Selected operating data for the three divisions follow: Sales revenue Cost of goods sold Miscellaneous operating expenses Average invested assets 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. Residual Income (Loss) Peak $ 326,000 197,000 37,000 1,240,000 Peak Required 1 Required 2 Compute the residual income for each division. Note: Loss amounts should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to nearest whole dollar. ViewStep by Step Solution
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