Question
Financial Performance Measures (a) Sher Manufacturing Pty Ltd has two retail divisions., which have the following reported results for the year: Furnishing department Dress making
Financial Performance Measures
(a) Sher Manufacturing Pty Ltd has two retail divisions., which have the following reported results for the year:
Furnishing department Dress making Division
Profit $5,400,000 $9,270,000
Average invested Capital 11,250,000 10,687,500
(i) Calculate the ROI for both divisions (ii) Calculate residual income assuming the firm requires a return of 12% on invested capital (iii) Which was the more successful division? Explain. (Hint: think carefully about this)
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College Accounting Chapters 1- 15
Authors: James A Heintz, Robert W Parry
23rd Edition
1337794767, 9781337794763
