Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The Global Products Corporation has three subsidiaries. Medical Supplies Heavy Machinery Electronics Sales $ 20,590,000 $ 5,140,000 $ 4,190,000 Net income (after taxes) 1,830,000 697,000

The Global Products Corporation has three subsidiaries. Medical Supplies Heavy Machinery Electronics Sales $ 20,590,000 $ 5,140,000 $ 4,190,000 Net income (after taxes) 1,830,000 697,000 364,000 Assets 19,900,000 8,450,000 3,860,000

(a-1) Compute the return on sales? (Round your answers to 2 decimal places. Omit the "%" sign in your response.) Return on sales Medical Supplies % Heavy Machinery % Electronics %

(a-2) Which division has the lowest return on sales? Electronics Medical Supplies Heavy Machinery

(b-1) Compute the return on assets? (Round your answers to 2 decimal places. Omit the "%" sign in your response.) Return on assets Medical Supplies % Heavy Machinery % Electronics %

(b-2) Which division has the highest return on assets? Heavy Machinery Electronics Medical Supplies

(c) Compute the return on assets for the entire corporation. (Round your answer to 2 decimal places. Omit the "%" sign in your response.) Return on assets %

(d) If the $8,450,000 investment in the heavy machinery division is sold off and redeployed in the medical supplies subsidiary at the same rate of return on assets currently achieved in the medical supplies division, what will be the new return on assets for the entire corporation? (Round your return on assets to 2 decimal places, return on redeployed assets to the nearest dollar amount and final answer to 2 decimal places. Omit the "%" sign in your response.) New return on assets %

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Options Futures And Other Derivatives

Authors: John C. Hull

9th Edition

0133456315, 9780133456318

More Books

Students also viewed these Finance questions