E10-8 (Algo) Evaluating Managerial Performance Using Return on Investment, Residual Income (LO 10-4, 10-5) Orange Corp. has two divisions: Fruit and Flower. The following information for the past year is available for each division: Sales revenue Cost of goods sold and operating expenses Net operating income Average invested assets Fruit Division $ 1,620,000 1,134,000 $ 486.000 $4,050,000 Flower Division $ 2,430,000 1.822.500 $ 607.500 S 2,430,000 Orange has established a hurdle rate of 10 percent. Required: 1-a. Compute each division's return on investment (ROI) and residual income for last year. 1-b. Determine which manager seems to be performing better. 2. Suppose Orange is investing in new technology that will increase each division's operating Income by $127,000. The total Investment required is $2,000,000, which will be split evenly between the two divisions. Calculate the ROI and residual income for each division after the investment is made. 3. Determine whether both managers will support the investment. Complete this question by entering your answers in the tabs below. Reg 1A Reg 18 Reg 2 Reg 3 Compute each division's return on investment (ROI) and residual income for last year. (Enter your ROI answers as a percentage rounded to two decimal places, (le, 0.1234 should be entered os 12.34) Fruit Division Flower Division ROI Residual income (LOS) Reg 18> E10-8 (Algo) Evaluating Managerial Performance Using Return on Investment, Residual Income (LO 10-4, 10-5) Orange Corp. has two divisions: Fruit and Flower. The following information for the past year is available for each division: $ S Sales revenue Cost of goods sold and operating expenses Net operating income Average invested assets Fruit Division 1,620,000 1,134,000 486,000 4,050,000 Plower Division 2, 430,000 1.822.500 607,500 2,430,000 $ $ $ $ Orange has established a hurdle rate of 10 percent. Required: 1-a. Compute each division's return on investment (ROI) and residual income for last year. 1-b. Determine which manager seems to be performing better 2. Suppose Orange is investing in new technology that will increase each division's operating income by $127.000. The total Investment required is $2,000,000, which will be split evenly between the two divisions. Calculate the ROI and residual income for each division after the investment is made 3. Determine whether both managers will support the investment Complete this question by entering your answers in the tabs below. Req 1A Reg 1B Req2 Reg 3 Determine which manager seems to be performing better. Fruit Division Flower Division $ Sales revenue Cont of goods sold and operating expenses Het operating income Average invested assets Division $ 1,620,000 1,134,000 $ 486,000 5 4,050,000 Division 2,430,000 1,822,500 607,500 2,430,000 $ S Orange has established a hurdle rate of 10 percent. Required: 1-a. Compute each division's return on Investment (ROI) and residual income for last year. 1-b. Determine which manager seems to be performing better. 2. Suppose Orange is investing in new technology that will increase each division's operating income by $127,000. The total investment required is $2,000,000, which will be split evenly between the two divisions. Calculate the ROI and residual income for each division after the investment is made 3. Determine whether both managers will support the investment. Complete this question by entering your answers in the tabs below. Reg 1A Reg 13 Req 2 Req3 Suppose Orange is investing in new technology that will increase each division's operating income by $127,000. The total Investment required is $2,000,000, which will be split evenly between the two divisions. Calculate the ROI and residual income for each division after the investment is made. (Enter your ROI answers as a percentage rounded to two decimal places, (1.0, 0.1234 should be entered as 12.34%.)) Show less Fruit Division Flower Division % % ROI Residual income (Loss) Ch10 Sloved $ Sales revenue Cost of goods sold and operating expenses Net operating income Average invested assets Fruit Division $ 1,620,000 1,134,000 $ 486,000 $ 4,050,000 Flower Division 2,430.000 1.822.500 607,500 2,430,000 $ $ Orange has established a hurdle rate of 10 percent Required: 1-a. Compute each division's return on investment (ROI) and residual income for last year. 1-b. Determine which manager seems to be performing better. 2. Suppose Orange is investing in new technology that will increase each division's operating income by $127.000. The total Investment required is $2,000,000, which will be split evenly between the two divisions. Calculate the ROI and residual income for each division after the investment is made 3. Determine whether both managers will support the investment Complete this question by entering your answers in the tabs below. Reg 1A Reg 18 Req2 Reg 3 Determine whether both managers will support the investment Fruit Division Manager Flower Division Manager Reg 2
