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Required information Problem 14-63, 14-64 (Algo) (LO 14-1, 2, 3, 4) Bentler Industries provides high-technology navigation and communication equipment for the aerospace and shipbuilding industries.
Required information Problem 14-63, 14-64 (Algo) (LO 14-1, 2, 3, 4) Bentler Industries provides high-technology navigation and communication equipment for the aerospace and shipbuilding industries. It is organized into two divisions, Aeronautics and Marine. The division presidents are given wide decisionmaking authority that covers operations, marketing, and asset acquisition and disposal. Bentler evaluates the division presidents on, among other things, ROI in their respective divisions. ROI is based on after-tax divisional income and beginning-of-year assets. Divisional income includes allocated corporate overhead. For the most recent year (year 3), data from the two divisions shows the following: The tax rate applied at Bentler is 20 percent. Problem 14-63 (Algo) Divisional Income, ROI, and Residual Income (LO 14-1, 2, 3) Required: a. Compute divisional income for year 3 for each of the divisions. b1. Evaluate the two divisions based on the information from the divisional income computed. b2. In terms of divisional income, which division performed better? c1. Compute ROI for year 3 for each of the divisions. c2. Which division performed better? d1. Compute residual income for year 3 for each of the divisions. Bentler uses a cost of capital of 12 percent. d2. Which division performed better
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