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PROBLEM 7 XYZ Ltd. Has three divisions X, Y and Z. The operating results of three divisions are as follows: X Y N $ $
PROBLEM 7 XYZ Ltd. Has three divisions X, Y and Z. The operating results of three divisions are as follows: X Y N $ $ $ Sales 10,00,000 10,00,000 20,00,000 Less : Total Cost 8,00,000 6,00,000 12,00,000 Profit 2,00,000 4,00,000 8,00,000 Investment 6,00,000 10,00,000 30,00,000 (i) Determine ROI of three divisions and rank these divisions on the basis of their performance. Determine residual income (RI) of three divisions and rank them assuming cost of capital is 15%. (ii)
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