Question
Problem 1: Return on Investment / Residual Income Hartz Industries has two divisions as follows: American National Net Income 9,000,000 15,000,000 Invested Assets 36,000,000 40,000,000
Problem 1: Return on Investment / Residual Income
Hartz Industries has two divisions as follows:
|
| American | National |
| Net Income | 9,000,000 | 15,000,000 |
| Invested Assets | 36,000,000 | 40,000,000 |
| Expected Rate of Return | 12.00% | 10.50% |
|
|
|
|
| Return on Investment |
|
|
| Expected Net Income |
|
|
| Residual Income |
|
|
Required
- Calculate the return on investment for both divisions (show as percentage with two decimals)
- Calculate the expected income from operations for both divisions
- Calculate the residual income for both divisions
- Which division performed better? Support your answer.
Which division performed better? Support your answer with numbers.
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Risk Management In Organisations An Integrated Case Study Approach
Authors: Margaret Woods
2nd Edition
1138632333, 9781138632332
