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Orange Corp. has two divisions: Fruit and Flower. The following information for the past year is available for each division: Fruit Division Sales revenue Cost
Orange Corp. has two divisions: Fruit and Flower. The following information for the past year is available for each division: Fruit Division Sales revenue Cost of goods sold and operating expenses Net operating income Average invested assets Flower Division $1,080,000 1,620,000 1,215,000 405,000 $ 2,250,000 S2,250,000 810,000 270,000 $ Orange has established a hurdle rate of 8 percent. Required 1-a. Compute each division's return on investment (ROI) and residual income for last year. (Enter your ROI answers as a percentage rounded to two decimal places, i.e., 0.1234 should be entered as 12.34%.)) Fruit Division Flower Division ROI Residual Income (Loss) 1-b. Detemine which manager seems to be performing better Fruit Division Flower Division 2. Suppose Orange is investing in new technology that will increase each division's operating income by $134,000. The total investment required is $2,200,000, which will be split evenly between the two dlvisions. Calculate the ROI and return on investment for each division after the investment is made. Enter your ROI answers as a percentage rounded to two decimal places, i.e. 0.1234 should be entered as 12.34% Fruit Division Flower Division ROI Residual Income (Loss)
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