Finch Technologies, Inc. has three divisions. Finch has a desired rate of return of 12.0 percent. The operating assets and income for each division are as follows: Divisions Printer Copier Operating Assets $ 600,000 870,000 420.000 $1,890,000 Operating Income $102,000 99,180 60.060 $261,240 Tax Total Finch headquarters has $126,000 of additional cash to invest in one of its divisions. The division managers have identified investment opportunities that are expected to yield the following ROls: Expected ROIS for Divisions Additional Investments Printer 13.50 Copier 12.50 11.54 Required a-1. Calculate the ROI for each division. a-2. Which division manager is currently producing the highest ROI? b. Based on ROI, which division manager would be most eager to accept the $126,000 of investment funds? c. Based on ROI, which division manager would be least likely to accept the $126,000 of investment funds? d. Which division offers the best investment opportunity for Finch? g. Calculate the residual income: (1) At the corporate (headquarters) level before the additional investment. (2) At the division level before the additional investment. (3) At the investment level. (4) At the division level after the additional investment Required a-1. Calculate the ROI for each division. a-2. Which division manager is currently producing the highest ROI? b. Based on ROI, which division manager would be most eager to accept the $126,000 of investment funds? c. Based on ROI, which division manager would be least likely to accept the $126,000 of investment funds? d. Which division offers the best investment opportunity for Finch? g. Calculate the residual income: (1) At the corporate (headquarters) level before the additional investment (2) At the division level before the additional investment. (3) At the investment level. (4) At the division level after the additional investment Complete this question by entering your answers in the tabs below. Reg A1 Reg A2 to D Req G1 Req G2 to G4 Calculate the ROI for each division. (Round your answers to 1 decimal place. (.e., 0.234 should be entered as 23.4).) Printer Division Copier Division Fax Division ROI % % % KROGA Reg A2 to D > a-2. Which division manager is currently producing the highest ROI? b. Based on ROI, which division manager would be most eager to accept the $126,000 of in c. Based on ROI, which division manager would be least likely to accept the $126,000 of inve d. Which division offers the best investment opportunity for Finch? a-2. Which division manager is currently producing the highest ROI? Based on ROI, which division manager would be most eager to b. accept the $126,000 of investment funds? Based on ROI, which division manager would be least likely to accept C. the $126,000 of investment funds? d. Which division offers the best investment opportunity for Finch? invester (2) At the division level before the additional investment. (3) At the investment level. (4) At the division level after the additional investment. Complete this question by entering your answers in the tabs below. Req A1 Req A2 to D Req G1 Req G2 to G4 Calculate the residual income: (Loss amounts should be indicated by a minus sig (2) At the division level before the additional investment. (3) At the investment level. (4) At the division level after the additional investment. Residual Income (loss) (2) Printer division Copier division Fax division (3) Printer division Copier division Fax division (4) Printer division Copier division Fax division
