Question
S10-7: Epic Sports Company makes snowboards, downhill skis, cross-country skis, skateboards, surfboards, and in-line skates. The company has found it beneficial to split operations into
S10-7: Epic Sports Company makes snowboards, downhill skis, cross-country skis, skateboards, surfboards, and in-line skates. The company has found it beneficial to split operations into two divisions based on the climate required for the sport: Snow Sports and Non-Snow Sports. The following divisional information is available for the past year:
Epic's management has specified a target 16% rate of return.
Calculate ROI
Refer to Epic Sports Data Set. 1. Calculate each division's ROI.
2. Top management has extra funds to invest. Which division will most likely receive those funds? Why?
3. Can you explain why one division's ROI is higher? How could management insight?
(Can you please show the work)
\begin{tabular}{lcccc} \hline & Sales & Operating Income & Total Assets & Current Liabilities \\ \hline Snow Sports & $5,800,000 & $1,044,000 & $4,500,000 & $450,000 \\ Non-Snow Sports & $8,800,000 & $1,584,000 & $6,400,000 & $700,000 \\ \hline \end{tabular}Step by Step Solution
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