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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
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: Operating Divisions Printer Copier Fax Operating Income $102,000 99,180 60,060 $261,240 Assets $ 600,000 870,000 420,000 be, Total $1,890,000 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 Divisions Printer Copier Expected ROIs for Additional Investments 13.5% 12.5% 11.5% Fax Required a-1. Calculate the ROl 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 Req A1 Req A2 to D Req G1 Req G2 to G4 Calculate the ROI for each division. (Round your answers to 1 decimal place. (i.e., .234 should be entered as 23.4.) ROI Printer Division
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