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For Year 1, one division of Apex Company reported operating assets of $5,000,000 and operating income of $750,000. Apex has established a target return on
For Year 1, one division of Apex Company reported operating assets of $5,000,000 and operating income of $750,000. Apex has established a target return on investment (ROI) of 14% for the division. Required:
1) Calculate the division's ROI for Year 1. Did it achieve the target set by the company?
2) Assuming that operating assets for Year 2 increase by 10%, by how much would operating income have to increase to reach the target of 14%?
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