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Nortn American beverage corporation IS a nlgnly Innovative pacesetter In tne cnanging sort oran mousrry. i-ouowmg Is financial data for each of the corporation' three
Nortn American beverage corporation IS a nlgnly Innovative pacesetter In tne cnanging sort oran mousrry. i-ouowmg Is financial data for each of the corporation' three divisions: Division A Division B Division C Sales $6,000,000 $10,000,000 $9,100,000 Average operating assets $1,200,000 5 2,500,000 $1,820,000 Net operating income $ 306,000 $ 910,000 $ 213,850 Minimum required rate of 20.00% 36.40% 17.00% return I 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 22% 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 Req 2 Req 3A Req 33 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.) Division A Division B Division C Compute the residual income (loss) for each division. (Do not round intermediate calculations. Loss amounts should indicated by a minus sign.) Ream-aucmaoss) Req 1 Req 2 Assume that each division is presented with an investment opportunity that would yield a 22% 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 C Req 1 Req 2 Req 3A Assume that each division is presented with an investment opportunity that would yield a 22% rate of return. If performance is being measured by residual income, which division or divisions will probably accept or reject the opportunity
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