Question
Hartz Industries has two divisions as follows: American National Net Income 9,000,000 15,000,000 Invested Assets 36,000,000 40,000,000 Expected Rate of Return 12.00% 10.50% Return on
Hartz Industries has two divisions as follows:
|
| American | National |
| Net Income | 9,000,000 | 15,000,000 |
| Invested Assets | 36,000,000 | 40,000,000 |
| Expected Rate of Return | 12.00% | 10.50% |
|
|
|
|
| Return on Investment |
|
|
| Expected Net Income |
|
|
| Residual Income |
|
|
Required
- Calculate the return on investment for both divisions (show as percentage with two decimals)
- Calculate the expected income from operations for both divisions
- Calculate the residual income for both divisions
- Which division performed better? Support your answer.
1. Which division performed better? Support your answer with numbers.
1. Please explain to Ethel Hartz, largest shareholder, what the return on investment means. What does that amount represent? How can she compare the two returns from problem 1?
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College Accounting Chapters 1-30
Authors: David Haddock, John Price, Michael Farina
16th Edition
1260247902, 978-1260247909
