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Poseidon Corporation manufactures a variety of gear for water sports. Poseidon has three dvisions: Lake,Rver, and Ocean. Each division is managed as an investment center.
Poseidon Corporation manufactures a variety of gear for water sports. Poseidon has three dvisions: Lake,Rver, and Ocean. Each division is managed as an investment center. During the curent year, the Ocean division experienced the tollowing transactions a. A special order was accepted at a selling price signf canty less than the crdinary seling price. The sale wil not impact other sales because this was a one-tme order and Ocean has excess capacty. The seling price was in excess of total variable costs. b, One ol three production managers in the Ocean Division submitted his resignation. The position willnot be filled due to current elf ciencies experienced in the producton department d. Equipment cosling 5500,000 was purchased to replace fully deprecialed, obsulele equiprment. e. The comparry's after-tax cot of capital increased from 8 percen to 10 percent, with no effect on the minimurm required rate of returi. f. The company's efiective tax rate decreazed from 35 percent to 30 percent Dctermine the impact on rcturn on investment, residual ncome, and ccanomic valuc added. Use the table belaw to organizc yaur answers. Usc (l) for increase, (D) for decrease (N) for no affect, to determinc the impact of the trancaction. Each transactian shoud ba treated
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