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Augusta Corp's Golf Division has sales of $201,000, cost of goods sold of $111,000, operating expenses of $36,000, average invested assets of $911,000, and a
Augusta Corp's Golf Division has sales of $201,000, cost of goods sold of $111,000, operating expenses of $36,000, average invested assets of $911,000, and a hurdle rate of 15.00 percent. Calculate the Golf Division's return on investment and its residual income.(Enter loss amount with a minus sign. Enter your ROI answer as a percentage rounded to two decimal places, (i.e., 0.1234 should be entered as 12.34%). Round your Residual Income (Loss) answer to the nearest whole dollar.) Return on Investment (ROI) Residual Income (Loss) % The Molding Division of Cotwold Company manufactures a plastic casing used by the Assembly Division. This casing is also sold to external customers for $41 per unit. Variable costs for the casing are $28 per unit and fixed cost is $6 per unit. Cotwold executives would like for the Molding Division to transfer 24,000 units to the Assembly Division at a price of $35 per unit. Assume that the Molding Division has enough excess capacity to accommodate the request. Required: 1. Should the Molding Division accept the $35 transfer price proposed by management? Yes 2. Calculate the effect on the Molding Division's net income if it accepts the $35 transfer price. Net Income will increase by _
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