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Luke Company has three divisions: Peak, View, and Grand. The company has a hurdle rate of 6.01 percent. Selected operating data for the three
Luke Company has three divisions: Peak, View, and Grand. The company has a hurdle rate of 6.01 percent. Selected operating data for the three divisions follow: Peak View Grand Sales revenue Cost of goods sold Miscellaneous operating expenses Average invested assets $ 344,000 $224,000 $298,000 208,000 105,000 194,000 39,000 1,390,000 32,000 960,000 39,000 1,065,000 Required: 1. Compute the return on investment for each division. 2. Compute the residual income for each division. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the return on investment for each division. (Enter your ROI answers as a percentage rounded to two decimal places, (ie., 0.1234 should be entered as 12.34%.)) Return on Investment Peak View Grand % Required 1 Required 2 >
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