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Division Division A ? Division B $10,000,000 $2,000,000 $2,500,000 ? ? ? $400,000 ? Sales revenue Income Average investment Sales margin Capital tumover ROI Residual
Division Division A ? Division B $10,000,000 $2,000,000 $2,500,000 ? ? ? $400,000 ? Sales revenue Income Average investment Sales margin Capital tumover ROI Residual income 20% ? 1 ? ? 25% ? 20% $120.000 2 ? ? Required: Fill in the blanks above. Refer to the preceding problem about Nevada Aggregates, Inc. Required: 1. Explain three ways the Division B manager could improve her division's ROI. Use numbers to illus- trate these possibilities. 2. Suppose Division A's sales margin increased to 25 percent, while its capital turnover remained con- stant. Compute the division's new ROI
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