Question
Chris Anderson, founded by a former vice-president of Wildhorse Industries, has been manufacturing prefabricated houses for the past five years. To compete with Wildhorse,
Chris Anderson, founded by a former vice-president of Wildhorse Industries, has been manufacturing prefabricated houses for the past five years. To compete with Wildhorse, Chris also expanded into the precut housing market by acquiring one of its suppliers, Presser Company. After designating Presser as an investment centre. Chris next decided to use the ROI as a performance measure and to give managers bonuses that are partly based on the ROI. Chris defines investments as average productive assets and expects a minimum return of 14% before income taxes. Presser's ROI has averaged 18.5% since it was acquired. In 2022, Presser found an investment opportunity that would have an estimated ROI of 17%. After analyzing the opportunity. Presser's management finally decided not to make the investment because management did not want the division's overall ROI to decrease The 2022 income statement for Presser follows. The division had operating assets of $25.20 million at the end of 2022, which was a 5% increase over the 2021 year-end balance. Sales revenue PRESSER DIVISION Income Statement Year Ended June 30, 2022 (in thousands) $51,000 Activate Window Go so Selongs to alme
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