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Orange Corp. has two divisions: Fruit and Flower. The following information for the past year is available for each division: $ Sales revenue Cost of
Orange Corp. has two divisions: Fruit and Flower. The following information for the past year is available for each division: $ Sales revenue Cost of goods sold and operating expenses Net operating income Average invested assets Fruit Division 1,740,000 1,392,000 348,000 3,480,000 Flower Division 2,610,000 1,957,500 652,500 2,718,750 $ $ $ $ Orange has established a hurdle rate of 6 percent. Req 1A Req 1B Req 2 Req 3 Suppose Orange is investing in new technology that will increase each division's operating income by $131,000. The total investment required is $2,200,000, which will be split evenly between the two divisions. Calculate the ROI and residual income 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%.)) Show less Fruit Division Flower Division % ROI % Residual Income (Loss)
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