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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 $ 332,000 212,000 44,000 $ 227,000 111,000 36,000 Grand $ 309,000 199,000 1,330,000 960,000 39,000 1,025,000 Sales revenue Cost of goods sold Miscellaneous operating expenses Average invested assets 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. 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 % % % Required 1 Required 2 Compute the residual income for each division. Note: Loss amounts should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to nearest whole dollar. Peak View Grand Residual Income (Loss)
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