Question
Sprint Company has the following data for 2009: Division A Division B Sales Revenue $400,000 $300,000 Contribution margin 160,000 125,000 Operating profit 80,000 30,000 Division
Sprint Company has the following data for 2009:
| Division A | Division B | |
| Sales Revenue | $400,000 | $300,000 |
| Contribution margin | 160,000 | 125,000 |
| Operating profit | 80,000 | 30,000 |
| Division Investment | 320,000 | 200,000 |
| Weighted average cost of capital | 15% | 15% |
Sprint Company has a target ROI of 20 percent. Required: Calculate the following amounts for each division:
| a. | Investment Turnover. |
| b. | ROI |
| c. | EVA |
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Principles Of Auditing
Authors: O. Ray Whittington, Kurt Pany, Walter B. Meigs
12th Edition
0256167796, 978-0256167795
