Question
? Division A Division B Division C Sales revenue Income ? $ 10,000,000 ? $520,000 $ 2,100,000 ? Average investment ? $ 2,670,000 ? Sales
Division A Division B Division C Sales revenue Income ? $ 10,000,000 ? $520,000 $ 2,100,000 ? Average investment ? $ 2,670,000 ? Sales margin 30% ? 35% Capital turnover 2 ? ? ROI Residual income ? ? ? 30% ? $122,000 Required: The following data pertain to three divisions of Nevada Aggregates, Incorporated. The company's required rate of return on inves capital is 8 percent. Note: Round "Capital turnover" answers to 2 decimal places. Answer is not complete. Division A Division B Division C Sales revenue $ 8,150,000 $ 40,300,000 Income $ 1,630,000 $ 8,866,000 Average investment $ 8,150,000 $ EA 10,075,000 Sales margin 20 % 22 % 25 % Capital turnover 1.00 4.00 ROI 20 % 88 200 % Residual income $ 978,000 $ 8,060,000 20 % $ 471,000
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