Question
Evaluating Investment Centers Terry Enterprises, Inc. has two divisionsthe Foods division and the Clothes division. Historically, Terry has used the division's ROI as the performance
Evaluating Investment Centers Terry Enterprises, Inc. has two divisionsthe Foods division and the Clothes division. Historically, Terry has used the division's ROI as the performance measure for the bonus determinations. Terry Foods division has gross total assets of $1,000,000, accumulated depreciation of $350,000, current liabilities of $250,000, and sales of $2,000,000. Foods' operating income is $170,000. Terry Clothes division has gross total assets of $5,000,000, accumulated depreciation of $2,100,000, current liabilities of $1,500,000, and sales of $8,000,000. Clothes' operating income is $720,000.
Use the DuPont formula to compute ROI for each division and for Terry Enterprises as a whole. Use operating income and gross total assets as the measures of income and investment.
Round answers to the nearest whole percentage.
ROI | |
---|---|
Foods | |
Clothes | |
Terry Enterprises |
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