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 5 Sales revenue Cost of goods sold and operating expenses tiet operating Income verace invested assets Fruit Division 5 720,000 540,000 5 150,000 5 2,000,000 Flower Division 1,080,000 310,000 270,000 1,350,000 5 $ Orange has established a hurdle rate of 6 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 $122,000. The total Investment required is $1.600.000, 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 1 Reg 1B Reg 2 Reg 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, (1.0, 0.1234 should be entered as 12.34%) Frull Division Flower Division % ROL Residual income (Loss) Reg 10 > Orange Corp. has two divisions Fruit and Flower. The following information for the past year is available for each division 5 Sales revenue Cost of goods sold and operating expenses Net operating income Average invested assets Fruit Division $ 720,000 540,000 5 180,000 $ 2,000,000 Flower Division 1,080,000 810.000 270,000 1,350,000 $ $ Orange has established a hurdle rate of 6 percent Required: 1-2. 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 $122,000. The total investment required is $1,600,000, 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 Determine which manager seems to be performing better OFru Dision Flower Division Cost of goods sold and operating expenses Net operating income Average invested assets $ $ 540,000 180,000 2,000,000 $ $ 810,000 270,000 1,350,000 Orange has established a hurdle rate of 6 percent Required: 1-0. 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 $122,000. The total investment required is $1,600,000, 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 Suppose Orange is investing in new technology that will increase each division's operating income by 122,000. The total Investment required is $1,600,000, 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, (... 0.1234 should be entered as 12.34%.)) Show less Fruit Division Flower Division ROI Residual Income (Loss) Req 18 Req3 > 5 Sales revenue Cost of goods sold and operating expenses Het operating income Average Invested assets $ 720,000 540,000 5 180,000 $ 2,000,000 IV.Sion 1,050,000 B10,000 270,000 1,350,000 5 5 Orange has established a hurdle rate of 6 percent Required: 1-0. 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 $122,000. The total Investment required is $1.600.000, 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 LA Reg 1B Reg 2 Rega Determine whether both managers will support the investment, Fruit Division Manager Power Division Manager
