Question
Pan Company is made up of three Divisions: Goose, Ice, and Joker. They have been presented with a new investment opportunity to sell highly technical
Pan Company is made up of three Divisions: Goose, Ice, and Joker. They have been presented with a new investment opportunity to sell highly technical stunt planes. Financial information is given below.
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| Maverick Company | Goose Division | Ice Division | Joker Division | New Investment Opportunity |
| Sales | $9,000,000 | $3,500,000 | $3,000,000 | $2,500,000 | $1,500,000 |
| Net Income | $ 3,000,000 | $ 1,000,000 | $ 1,200,000 | $ 800,000 | $ 500,000 |
| Assets | 12,200,000 | $ 4,000,000 | $ 2,600,000 | 4,000,000 | $1,600,000 |
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| DROI | 23% |
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- Calculate the Margin for the Company as a whole, each division, and the investment opportunity.
- Calculate the Turnover for the Company as a whole, each division, and the investment opportunity
- Calculate the ROI for the Company as a whole, each division, and the investment opportunity Calculate the Residual income for the Company as a whole, each division, and the investment opportunity
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| Maverick Company | Goose Division | Ice Division | Joker Division | New Investment Opportunity |
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| ROI |
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| RI |
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- Should the company take this investment based on ROI?
- Which division should not take this opportunity based on ROI?
- Which division is most likely to take this opportunity based on RI?
- As a manager, which division would you offer this opportunity to?
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Maximizing Corporate Value Through Mergers And Acquisitions A Strategic Growth Guide
Authors: Patrick A. Gaughan
1st Edition
1118108744, 9781118108741
