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har5 Wildhorse Industries has manufactured prefabricated houses for over 20 years. The houses are constructed in sections that are assembled on customers' lots. Wildhorse expanded
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Wildhorse Industries has manufactured prefabricated houses for over 20 years. The houses are constructed in sections that are assembled on customers' lots. Wildhorse expanded into the precut housing market when it acquired Miramichi Company, one of its suppliers. In this market, various types of lumber are precut into the appropriate lengths, banded into packages, and shipped to customers' lots for assembly. Wildhorse designated the Miramichi division as an investment centre. Wildhorse uses the return on investment as a performance measure and defines investment as the average operating assets. Management bonuses are based in part on the ROI. All investments are expected to earn a minimum rate of return of 15%. Miramichi's ROI has ranged from 20.2% to 23.1% after it was acquired. Miramichi had an investment opportunity in 2022 that had an estimated ROI of 19%, Miramichi's management decided against the investment because it believed the investment would decrease the division's overall ROI. Selected financial information for Miramichi is presented below. The division's average operating assets were $7,322,000 for the vear 2022. Calculate the following performance measures for 2022 for the Miramichi division Step by Step Solution
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