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Consider the following data, which relate to the two divisions of Penny Worth Products: Division 1 Division 2 Total assets $69,400,000 $23,000,000 Noninterest-bearing current liabilities

Consider the following data, which relate to the two divisions of Penny Worth Products:

Division 1

Division 2

Total assets

$69,400,000

$23,000,000

Noninterest-bearing current liabilities

4,510,000

2,320,000

NOPAT

11,300,000

5,880,000

Required rate of return

11%

10%

Compare the two divisions in terms of return on investment and residual income. In the past year, which division has created the most wealth for Penny Worth shareholders? (Round ROI to 2 decimal place, e.g. 0.25. Enter negative answers preceding either - sign, e.g. -45 or in parentheses, e.g. (45).)

Division 1

Division 2

ROI

enter ROI rounded to 2 decimal places

enter ROI rounded to 2 decimal places

Residual income/EVA

enter Residual income/EVA in dollars rounded to 0 decimal places

enter Residual income/EVA in dollars rounded to 0 decimal places

select a division Division 2Division 1 had highest return on investment.
select a division Division 2Division 1 had highest residual income.

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