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The following information is available about the status and operations of the Manufacturing Division of Taylor Company, which has a hurdle rate of 6%. Divisional
The following information is available about the status and operations of the Manufacturing Division of Taylor Company, which has a hurdle rate of 6%. Divisional identifiable average assets $ 411,637 Divisional income from operations $ 18,924 Divisional sales revenue $ 368,363 1. Compute the ROI for the Manufacturing Division. 2. Break the Manufacturing Division ROI down using the Profit Margin and Investment turnover (DuPont) formula. 3. Compute the residual income for the Manufacturing Division. Luke Company has three divisions: Peak, View, and Grand. The company has a hurdle rate of 6.51 percent. Selected operating data for the three divisions follow: Sales revenue Cost of goods sold Miscellaneous operating expenses Average invested assets Peak $ 332,000 $ 198,000 40,000 1,390,000 View Grand 224,000 $ 299,000 119,000 198,000 38,000 31,000 920,000 1,115,000 Required: 1. Compute the return on investment for each division. 2. Compute the residual income for each division. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the return on investment for each division. (Enter your ROI answers as a percentage rounded to two decimal places, (i.e., 0.1234 should be entered as 12.34%.)) Peak View Grand Return on Investment % % % Required Required 2 > Luke Company has three divisions: Peak, View, and Grand. The company has a hurdle rate of 6.51 percent. Selected operating data for the three divisions follow: Sales revenue Cost of goods sold Miscellaneous operating expenses Average invested assets Peak $ 332,000 $ 198,000 40,000 1,390,000 View Grand 224,000 $ 299,000 119,000 198,000 38,000 31,000 920,000 1,115,000 Required: 1. Compute the return on investment for each division 2 Compute the residual income for each division. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the residual income for each division. (Loss amounts should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to nearest whole dollar.) Peak View Grand Residual income Loss)
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