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Cherry, Inc. has three operating divisions and requires a 12% return on all investments. Selected information presented here: . a. Calculate the missing amounts for
Cherry, Inc. has three operating divisions and requires a 12% return on all investments. Selected information presented here:
. a. Calculate the missing amounts for each division.
b. Comment on the relative performance of each division.
c. Provide an example to show how residual income improves decision making at the divisional level
| Division A | Division B | Division C |
Revenues | ? | ? | $1,000,000 |
Operating Income | $100,000 | ? | $120,000 |
Operating Assets | ? | $300,000 | $500,000 |
Margin | ? | 12% | ? |
Turnover | 2 turns | 1 turn | ? |
ROI | ? | ? | ? |
Residual Income | $25,000 | ? | ? |
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