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The Campus Division of All-States Bank has assets of $2,600 million. During the past year, the division had profits of $265 million. All-States Bank has
The Campus Division of All-States Bank has assets of $2,600 million. During the past year, the division had profits of $265 million. All-States Bank has a cost of capital of 3 percent. Ignore taxes. Required: a. Compute the divisional ROI for the Campus Division. (Enter your answer as a percentage rounded to 1 decimal place (i.e., 32.1).) Divisional ROI % b. Compute the divisional RI for the Campus Division. (Enter your answer in dollars, not in millions.) Divisional RI References eBook & Resources Back Mountain Industries (BMI) has two divisions: East and West. BMI has a cost of capital of 15 percent. Selected financial information (in thousands of dollars) for the first year of business follows: Sales revenue Income Investment (beginning of year) Current liabilities (beginning of year) R&D expendituresa East $1,200 300 2,200 220 600 West $5,400 510 3,200 220 500 R&D is assumed to benefit two periods. All R&D is spent at the beginning of the year. Required: a-1. Evaluate the performance of the two divisions assuming BMI uses return on investment (ROI). (Round your final answers to nearest whole percentage value.) ROI Divisions East West % a-2. Which division had the better performance? O East O West
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