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Campbell Technologies, Inc. has three divisions. Campbell has a desired rate of return of 13.0 percent. The operating assets and income for each division are
Campbell Technologies, Inc. has three divisions. Campbell has a desired rate of return of 13.0 percent. The operating assets and income for each division are as follows: Divisions Printer Copier Fax Operating Assets $ 580,000 850,000 400,000 $1,830,000 Operating Income $ 99,760 98,600 58,000 $ 256, 360 Total Campbell headquarters has $124,000 of additional cash to invest in one of its divisions. The division managers have identified investment opportunities that are expected to yield the following Rols: Divisions Printer Copier Fax Expected ROIs for Additional Investments 14.58 13.58 12.5% Required a-1. Calculate the ROI for each division. a-2. Which division manager is currently producing the highest ROI? b. Based on ROI, which division manager would be most eager to accept the $124,000 of investment funds? c. Based on ROI, which division manager would be least likely to accept the $124,000 of investment funds? d. Which division offers the best investment opportunity for Campbell? g. Calculate the residual income: (1) At the corporate (headquarters) level before the additional investment. (2) At the division level before the additional investment. (3) At the investment level. (4) At the division level after the additional investment. Complete this question by entering your answers in the tabs below. Req A1 Req A2 to D Req G1 Req G2 to G4 Calculate the ROI for each division. (Round your answers to 1 decimal place. (i.e., 0.234 should be entered as 23.4).) ROI Printer Division % % Copier Division Fax Division % Complete this question by entering your answers in the tabs below. Req A1 Req A2 to D Req G1 Req G2 to G4 Calculate the residual income at the corporate (headquarters) level before the additional investment. Residual income Complete this question by entering your answers in the tabs below. Req A1 Req A2 to D Req G1 Req G2 to G4 Calculate the residual income: (Loss amounts should be indicated by a minus sign.) (2) At the division level before the additional investment. (3) At the investment level. (4) At the division level after the additional investment. Show less Residual Income (loss) (2) Printer division Copier division Fax division (3) Printer division Copier division Fax division (4) Printer division Copier division Fax division
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