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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 | $ | 332,000 | $ | 234,000 | $ | 312,000 |
| Cost of goods sold | 206,000 | 113,000 | 201,000 | |||
| Miscellaneous operating expenses | 43,000 | 31,000 | 32,000 | |||
| Average invested assets | 1,300,000 | 950,000 | 1,125,000 | |||
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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%: 2. Compute the residual income for each division. (Loss amounts should be indicated by a minus sign. Round your answers to nearest whole dollar.) Peak: View% Grand:
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