North American Beverage Corporation is a highly innovative pacesetter in the changing soft drink industry. Following is financial data for each of the corporation' three divisions: Division A Division B Division C Sales $ 5,700,000 $ 9,700,000 $ 8,800,000 Average operating assets $ 1,140,000 $ 4,850,000 $ 1,760,000 Net operating income $ 273,600 $ 853,600 $ 180,400 Minimum required rate of return 17.00 17.60% 14.00 Required: 1. Compute the return on investment (ROI) for each division using the formula stated in terms of margin and turnover. 2. Compute the residual income (loss) for each division 3. Assume that each division is presented with an investment opportunity that would yield a 17% rate of return. a. If performance is being measured by ROI, which division or divisions will probably accept or reject the opportunity? b. If performance is being measured by residual income, which division or divisions will probably accept or reject the opportunity? Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Reg 3 Reg 38 Compute the return on investment (ROI) for each division using the formula stated in terms of margin and turnover. (Do not round Intermediate calculations. Round your answers to 2 decimal places.) Margin Turnover ROI % % Division A Division B Division C % % % North American Beverage Corporation is a highly innovative pacesetter in the changing soft drink industry. Following is financial data for each of the corporation' three divisions: Sales Average operating assets Net operating income Minimum required rate of return Division A $ 5,700,000 $ 1,149,000 $ 273,600 17.00% Division B $ 9,700,000 $ 4,850,000 $ 853,600 17.604 Division $ 8,800,000 $ 1,760,000 $ 180,400 14.084 Required: 1. Compute the return on investment (ROI) for each division using the formula stated in terms of margin and turnover, 2. Compute the residual income (loss) for each division 3. Assume that each division is presented with an investment opportunity that would yield a 17% rate of return. a. If performance is being measured by ROI, which division or divisions will probably accept or reject the opportunity? b. If performance is being measured by residual income, which division or divisions will probably accept or reject the opportunity? Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Reg 3A Reg 38 Compute the residual income (loss) for each division. (Do not round intermediate caldulations. Loss amounts should be indicated by a minus sign.) Division A Division B Division C Residual income (loss) North American Beverage Corporation is a highly innovative pacesetter in the changing soft drink industry. Following is financial data for each of the corporation three divisions: Sales Average operating assets Net operating income Minimum required rate of return Division A $ 5,700,000 $ 1,140,000 $ 273,600 17.00% Division B $ 9,700,000 $ 4,850,000 $ 853,600 17.60% Division C $ 8,800,000 $ 1,760,000 $ 180,400 14.004 Required: 1. Compute the return on investment (ROI) for each division using the formula stated in terms of margin and turnover. 2. Compute the residual income (loss) for each division. 3. Assume that each division is presented with an investment opportunity that would yield a 17% rate of return. a. If performance is being measured by ROI, which division or divisions will probably accept or reject the opportunity? b. If performance is being measured by residual income, which division or divisions will probably accept or reject the opportunity? Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Reg 3A Reg 36 Assume that each division is presented with an investment opportunity that would yield a 17% rate of return. If performance is being measured by ROI, which division or divisions will probably accept or reject the opportunity? Division A Division B Division North American Beverage Corporation is a highly innovative pacesetter in the changing soft drink industry. Following is financial data for each of the corporation' three divisions: Sales Average operating assets Net operating income Minimum required rate of return Division A $ 5,700,000 $1,148,888 $ 273,600 17.00 Division B Division C $ 9,700,000 $ 8,800,000 $ 4,850,000 $ 1,760,000 $ 853,680 $ 180, 480 17.604 14.ee Required: 1. Compute the return on investment (ROI) for each division using the formula stated in terms of margin and turnover. 2. Compute the residual income (loss) for each division. 3. Assume that each division is presented with an investment opportunity that would yield a 17% rate of return. a. If performance is being measured by ROI, which division or divisions will probably accept or reject the opportunity? b. If performance is being measured by residual income, which division or divisions will probably accept or reject the opportunity? Complete this question by entering your answers in the tabs below. Req 1 Reg 2 Req Reg 38 Assume that each division is presented with an investment opportunity that would yield a 17% rate of retur If performance is being measured by residual income, which division or divisions will probably accept or reject the opportunity? Division A Division B Division C
