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Please answer all the requirements correctly. Thank You Selected sales and operating data for three divisions of different structural engineering firms are given as follows:
Please answer all the requirements correctly. Thank You
Selected sales and operating data for three divisions of different structural engineering firms are given as follows: Sales Average operating assets Net operating income Minimum required rate of return Division A $ 5,000,000 $ 1,000,000 $ 205,000 16.00% Division B $ 9,000,000 $ 4,500,000 $ 729,000 16.20% Division C $ 8,100,000 $ 1,620,000 $ 109,350 13.00% Required: 1. Compute the return on investment (ROI) for each division using the formula stated in terms of margin and turnover. 2. Compute the residual income (loss) for each division. 3. Assume that each division is presented with an investment opportunity that would yield a 16% rate of return. a. If performance is being measured by ROI, which division or divisions will probably accept or reject the opportunity? b. If performance is being measured by residual income, which division or divisions will probably accept or reject the opportunity? Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req Req 3B Compute the return on investment (ROI) for each division using the formula stated in terms of margin a round intermediate calculations. Round your answers to 2 decimal places.) Margin Turnover ROI Division A Division B Division C Req 1 Req 2 Req 3A Req 3B Compute the residual income (loss) for each division. (Do not round intermediate calculations. Loss amounts should be indicated by a minus sign.) Division A Division B Division C Residual income (loss) Req 1 Req 2 Req Req 3B Assume that each division is presented with an investment opportunity that would yield a 16% rate of return. If performance is being measured by ROI, which division or divisions will probably accept or reject the opportunity? Division A Division B Division C Req 1 Req 2 Req 3A Req 3B Assume that each division is presented with an investment opportunity that would yield a 16% rate of return. If performance is being measured by residual income, which division or divisions will probably accept or reject the opportunity? Division A Division B Division CStep by Step Solution
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