Answered step by step
Verified Expert Solution
Link Copied!

Question

00
1 Approved Answer

Perez Technologies, Inc. has three divisions. Perez has a desired rate of return of 12.5 percent. The operating assets and income for each division are

image text in transcribed

Perez Technologies, Inc. has three divisions. Perez has a desired rate of return of 12.5 percent. The operating assets and income for each division are as follows: Operating Operating Divisions Assets Income printer $ 650,00 $186,600 Copier 920, 880 180, 280 Fax 478,808 64,860 Total $2,848,800 5271,740 Perez $. adquarters has $131,000 of additional cash to VIVES. in one of its divisions. The division managers have identified investment opportunities that are expected to yield the following Rols: Expected ROIS for Divisions Additional Investments Printer 14.99 Copier 13.3% Fax 12.00 Required a-1. Calculate the ROI for each division 8-2. Which division manager is currently producing the highest ROI? b. Based on ROI, which division manager would be most eager to accept the $131000 of investment funds? c. Based on ROI, which division manager would be least likely to accept the $131,000 of investment funds? d. Which division offers the best investment opportunity for Perez? g. Calculate the residual income: (1) At the corporate (headquarters) level before the additional investment. (2) At the division level before the additional investment. (3) At the investment level (4) At the division level after the additional investment. Reg A1 Reg A2 to D Req G1 Req G2 to 64 Calculate the ROI for each division. (Round your answers to 1 decimal place. (.e., 0.234 should be entered as 23.4).) ROI % Printer Division Copier Division Fax Division % % Req A1 Reg A2 to D Rea G Req G2 to G4 a-2. Which division manager is currently producing the highest ROI? b. Based on ROI, which division manager would be most eager to accept the $131,000 of investment funds? c. Based on ROI, which division manager would be least likely to accept the $131,000 of investment funds? d. Which division offers the best investment opportunity for Perez? Show less TERRE 8- 2. Which division manager is currently producing the highest ROI? t. Based on ROI, which division manager would be most eager to accept the $131,000 of investment funds? c. Based on ROI, which division manager would be least likely to accept the $131.000 of investment funds? d. Which division offers the best investment opportunity for Perez? Req AI Reg A2 to D Ren GI Req G2 to G4 Calculate the residual income at the corporate (headquarters) level before the additional investment. Residual income > Reg A1 Reg A2 to D Req G1 Req G2 to G4 Calculate the residual income: (Loss amounts should be indicated by a minus sign.) (2) At the division level before the additional investment. (3) At the investment level. (4) At the division level after the additional investment Show less LE Residual Income (loss) 12) Printer division Copier division Fax division (3) Printer division Copler division Fax division (4) Printer division Capier division Fax division

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting Principles

Authors: Paul D Kimmel, Donald E Kieso Jerry J Weygandt

IFRS global edition

1-119-41959-4, 470534796, 9780470534793, 9781119419594 , 978-1119419617

Students also viewed these Accounting questions