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Omaha Grain Company has two divisions, which reported the following results for the most recent year. Division I Division II Income $2,700,000 $600,000 Average Invested
Omaha Grain Company has two divisions, which reported the following results for the most recent year.
Division I | Division II | |
Income | $2,700,000 | $600,000 |
Average Invested Capital | 18,000,000 | 3,000,000 |
ROI | 15% | 20% |
1. Calculate the imputed interest rate, at which the two divisions' residual income is the same.
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