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Luke Company has three divisions: Peak, View, and Grand. The company has a hurdle rate of 5.76 percent. Selected operating data for the three divisions
Luke Company has three divisions: Peak, View, and Grand. The company has a hurdle rate of 5.76 percent. Selected operating data for the three divisions follow: Peak View Grand $ 340,000 237,000 301,000 193,000 36,000 870,000 1,105,000 Sales revenue Cost of goods sold Miscellaneous operating expenses Average invested assets 209,000 37,000 118,000 35,000 1,380,000 Required 1. Compute the return on investment for each division. (Enter your ROI answers as a percentage rounded to two decimal places, (i.e., 0.1234 should be entered as 12.34%.)) Peak View Grand Return on Investment 2. Compute the residual income for each division. (Loss amounts should be indicated by a minus sign. Round your answers to nearest whole dollar.) View Grand Peak Residual Income (Loss)
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