IFIX AUTO Inc. allows its divisions to operate as autonomous units. Their results for the current year
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IFIX AUTO Inc. allows its divisions to operate as autonomous units. Their results for the current year were as follows:
Consumer
Commercial
Truck
Revenues
$1,650,000
$900,000
$5,800,000
Current assets
210,000
152,500
419,000
Capital assets
870,000
630,000
1,590,000
Current liabilities
275,000
127,000
399,000
Net operating income
235,000
70,000
560,000
After-tax income
186,000
55,404
443,234
Weighted average cost of capital
9.5%
9.5%
9.5%
Required:
For each division compute the
a. return on sales
b. return on investment based on total assets employed
c. economic value added
d. residual income based on net operating income
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