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Return on Investment The Walt Disney Company has four profitable business segments, described as follows: Media Networks: The ABC television and radio network, Disney channel,
Return on Investment The Walt Disney Company has four profitable business segments, described as follows: Media Networks: The ABC television and radio network, Disney channel, ESPN, A&E, E!, and Disney.com Parks and Resorts: Walt Disney World Resort, Disneyland, Disney Cruise Line, and other resort properties Studio Entertainment: Walt Disney Studios, which releases films by Pixar Animation Studios, Marvel Studios, Disney/Lucasfilm, and Touchstone Pictures Consumer Products: Character merchandising, Disney stores, books, and magazines Disney recently reported sector income from operations, revenue, and invested assets (in millions) as follows: Invested Assets Revenue Income from Operations $7,321 2,663 Media Networks Parks and Resorts Studio Entertainment $21,152 15,099 6,988 4,274 $29,887 23,335 15,155 1,549 Consumer Products 1,356 7,526 a. Use the DuPont formula to determine the return on investment for the four Disney sectors. Round whole percents to one decimal place and investment turnover to two decimal places. Profit Margin Investment Turnover ROI Media Networks 0.71 24.5 % 35 18 x % X % Parks and Resorts ( 0.65 Studio Entertainment 0.46 22 X % 32 X % 11.4 10.2 18.0 % % x % Consumer Products 0.57 b. How do the four sectors differ in their profit margin, investment turnover, and return on investment? Parks and Resorts X Consumer Products X investment. has the highest profit margin, while Consumer Products X has the lowest profit margin. has the highest return on investment, while Studio Entertainment has the lowest return on Feedback Check My Work Income from operations divided by sales equals profit margin. Sales divided by invested assets equals investment turnover. Multiply these two values for the rate of return
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