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Problem 13-38 Improving ROI (LO 13-3) The following data pertain to three divisions of Nevada Aggregates, Inc. The company's required rate of return on
Problem 13-38 Improving ROI (LO 13-3) The following data pertain to three divisions of Nevada Aggregates, Inc. The company's required rate of return on invested capital is 8 percent. Sales revenue Income Average investment Sales margin Capital turnover ROI $420,000 Division A ? Division B $12,000,000 Division C ? $ 2,010,000 $ 2,650,000 20% 25% 3 ? P P 30% Residual income ? $ 121,000 Required: 2. Suppose Division A's sales margin increased to 25 percent, while its capital turnover remained constant. Compute the division's new ROL. New return on investment %
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