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The Supreme Sports Company produces a wide variety of outdoor sports equipment. Its newest division, Golf Technology, manufactures and sells a single product-AccuDriver, a golf
The Supreme Sports Company produces a wide variety of outdoor sports equipment. Its newest division, Golf Technology, manufactures and sells a single product-AccuDriver, a golf club that uses global positioning satellite technology to improve the accuracy of golfers' shots. The demand for AccuDriver is relatively insensitive to price changes. The following data are available for Golf Technology, which is an investment center for Supreme Sports: (Click the icon to view the data.) Requirements 1. Compute Golf Technology's ROI if the selling price of AccuDrivers is $650 per club. 2. If management requires an ROI of at least 20% from the division, what is the minimum selling price that the Golf Technology Division should charge per AccuDriver club? 3. Assume that Supreme Sports judges the performance of its investment centers on the basis of RI rather than ROI. What is the minimum selling price that Golf Technology should charge per AccuDriver if the company's required rate of return is 18%? Requirement 1. Compute Golf Technology's ROl if the selling price of AccuDrivers is $650 per club. Determine the formula used to calculate ROI, then calculate the ROl for Golf Technology. (Enter the ROl as a percentage, rounded to the nearest hundredth percent, X.XX%.) RO Operating income Investment Data Table Total annual fixed costs Variable cost per AccuDriver Number of AccuDrivers sold each year Average operating assets invested in the division $ 26,000,000 450 165,000 53,000,000
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