Question
Ranking Divisional Performance Five Star company has five divisions: S,T,A,R and Y.Overall sales of the company totalled 2,500,000 for which S,T,A,R and Y contributes according
Ranking Divisional Performance
Five Star company has five divisions: S,T,A,R and Y.Overall sales of the company totalled 2,500,000 for which S,T,A,R and Y contributes according to the following ratio respectively; 3:1:2.5:1.5:2 and profit percentages on sales were20%, 15%, 30%, 25% and 40% respectively.
Required:
1.Rank the divisions according to the absolute value of net income.
2.Rank the project according to their ROI assuming each division had used average investment of800,000, 400,000, 500,000, 600,000 and 900,000 respectively.
3.Rank the project according to residual income if each division were given a target net income of 15% of their average investment.
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