Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

hi can you please help me answer this question, thank you so much Fanning Technologies, Inc. has three divisions. Fanning has a desired rate of

hi can you please help me answer this question, thank you so much

image text in transcribed
Fanning Technologies, Inc. has three divisions. Fanning has a desired rate of return of12.5 percent. The operating assets and income for each division are as follows: Operating Operating Divisions Assets Income Printer $ 590,000 $100,890 Copier 860,000 98,900 Fax 410,000 59,040 Total $1,860,000 $258,830 Fanning headquarters has $125,000 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 14.0% Copier 13.0% Fax 12.0% Required a-1. Calculate the ROI for each division. 3-2. Which division manager is currently producing the highest ROI? b. Based on ROI, which division manager would be most eager to accept the $125,000 ofinvestment funds? c. Based on ROI, which division manager would be least likely to accept the $125,000 ofinvestment funds? (1. Which division offers the best investment opportunity for Fanning? 9. 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

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Forensic And Investigative Accounting

Authors: G. Stevenson Smith D. Larry Crumbley, Edmund D. Fenton

10th Edition

0808056301, 9780808056300

More Books

Students also viewed these Accounting questions