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Luke Company has three divisions: Peak, View, and Grand. The company has a hurdle rate of 5.51 percent. Selected operating data for the three divisions
Luke Company has three divisions: Peak, View, and Grand. The company has a hurdle rate of 5.51 percent. Selected operating data for the three divisions follow: Peak View Grand Sales revenue $ 335,000 $ 227,000 $ 305,000 Cost of goods sold 200,000 103,000 194,000 Miscellaneous operating expenses 42,000 38,000 39,000 Average invested assets 1,370,000 900,000 1,075,000 Required: Compute the return on investment for each division. Compute the residual income for each division
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