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Luke Company has three divisions: Peak, View, and Grand. The company has a hurdle rate of 6 percent. Selected operating data for the three
Luke Company has three divisions: Peak, View, and Grand. The company has a hurdle rate of 6 percent. Selected operating data for the three divisions follow: Sales revenue Cost of goods sold. Miscellaneous operating expenses Average invested assets Required: Peak $325,000 216,000 45,000 1,100,000 View $220,000 123,000 36,000 990,000 Grand $ 298,000 202,000 39,000 1,000,000 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. Note: Enter your ROI answers as a percentage rounded to two decimal places, (i.e., 0.1234 should be entered as 12.34%.) Return on Investment Peak View Grand
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