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Return on Assets (ROA) The following information relates to the operating performance of two divisions of Campbell Food International Company's: 1) Soup and Sauces
Return on Assets (ROA) The following information relates to the operating performance of two divisions of Campbell Food International Company's: 1) Soup and Sauces and 2) Beverages. (all figures are in millions except for WACC) Sales Net Income Interest Average Average Operating Assets Current Liabilities Weighted Average Cost of Capital Division 1 $1,500 $105 $20 $1,200 $400 16% Division 2 $250 $27 $4 $300 $150 16% The tax rate is 25%. REQUIRED: (a) Compute each division's profit margin for return on assets (ROA). (b) Compute each division's return on assets (ROA). (e) Comments on the results of the preceding calculations and what would you recommend for the Company to do to improve return on assets (ROA). CS Scanned with CamScanner
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