Simple ROI and Economic Profit Calculations

Consider the following data:

	X	Y	Z
Invested Capital	$1,020,000	____	$1,200,000
Income	_____	$187,650	$210,000
Revenue	$2,550,000	$3,753,000	_______
Return on Sales	6%	____%	_____%
Capital Turnover	_____	_____	3.5
Rate of Return on invested capital	____%	13,5%	_____%

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.

Begin by selecting the formula and then enter the amounts in the formula and calculate the economic profit or loss for each division.

3. Which division is the best performer? Explain.