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Question 24 (10 points) Share the following complete information about Corp. Magenta and Fuschia division Sales Operatincome Average operating assets Marin Thanover Return on investment
Question 24 (10 points) Share the following complete information about Corp. Magenta and Fuschia division Sales Operatincome Average operating assets Marin Thanover Return on investment (ROI Magenta 5800,000 56-4.000 B 1695 Fuschia D E $220.000 596 4.5 F Required: a. Complete the missing information for each of the divisions: 6 marks B D $ s Average operating assets for Magenta Division % Margin for Magenta Division Turnover for Magenta Division is times. Sales for Fuschia Division Operating income for Fuschia Division % Return on investment for Fuschia Division b. Assume Magenta Division has a minimum required rate of return of 12%. Based on this information and your calculations above, determine Magenta Division's residual income. 2 marks E $ F c. Assume that Magenta Division has an investment opportunity that would yield a rate of return of 13%. If the division manager's performance is being measured by ROI, is she likely to accept the opportunity? Why or why not? 2 marks
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