Question
ROI and Economic Profit Calculations X Y Z invested capital $1,050,000 $_______ $1,200,000 income $________ $142,800 $210,000 revenue $2,310,000 $2,856,000 $_______ return on sales 3.00%
ROI and Economic Profit Calculations
X | Y | Z | |
invested capital | $1,050,000 | $_______ | $1,200,000 |
income | $________ | $142,800 | $210,000 |
revenue | $2,310,000 | $2,856,000 | $_______ |
return on sales | 3.00% | ________% | _________% |
capital turnover | _________ | ________ | 3.5 |
rate of return o invested capital | _________% | 10.50% | __________% |
1. Prepare a similar tabular presentation, filling in all blanks.
2. Suppose each division is assessed a capital charge based on a cost of capital of 10% of invested capital. Compute the economic profit for each division.
3. Which division is the best performer? Explain.
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