Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Kase Tractor Company allows its divisions to operate as autonomous units. Its results for the current year were as follows: Mark to review this sous
Kase Tractor Company allows its divisions to operate as autonomous units. Its results for the current year were as follows: Mark to review this sous | Next Revenues Current assets Capital assets Current liabilities Net operating income After-tax income Weighted average cost of capital Plows $2,250,000 800,000 1,000,000 350,000 220.000 143,000 8.5% Tractors Combines $500,000 $4,800,000 152,500 1.435,000 400,000 1,750,000 75,000 540,000 60,000 480,000 39,000 312,000 8.5% 8.5% Required: Q ? a. Compute the return on sales for each division. (3 marks) b. Compute the return on investment for each division based on total assets employed. (3 marks) c. Compute the economic value added for each division (3 marks) d. If you were the manager of the tractor division, which method of performance evaluation would you prefer. Why? (1 mark)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started