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unsure about last four questions regarding the expansion project 1 Wescott Company has three divisions: A. B. and C. The company has a hurdle rate

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1 Wescott Company has three divisions: A. B. and C. The company has a hurdle rate of 8 percent. Selected operating data for the three divisions are as follows: Sales revenue Cost of goods sold Miscellaneous operating expenses Interest and taxes Average invested assets Division A Division Division $1,225,200 $ 1,224,000 $1,250,000 757,600 899,000 908,000 80,000 68,000 69,00 64,000 57,00 57,000 11,068,000 2,682,000 4,409,000 Wescott is considering an expansion project in the upcoming year that will cost $6.9 million and return $620.000 per year. The project would be implemented by only one of the three divisions. Required: 1. Compute the ROI for each division 2. Compute the residual income for each division 3. Rank the divisions according to the ROI and residual income of each 4-o. Compute the return on investment on the proposed expansion project 4.b. Is this an acceptable project? 5. Without any additional calculations, state whether the proposed project would increase or decrease each division's ROI 6. Compute the new ROI and residual income for each division if the project was implemented within that division Complete this question by entering your answers in the tabs below. Reg! Reg 2 Reg 3 Reg Reg 40 Reg 5 Reg 6 Compute the return on investment on the proposed expansion project (Round your percentage answer to 2 decimal places, tie. 0.12 should be entered a 12.14 Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Req3 Req 4A Reg 4B Reg 5 Reg 6 Compute the return on investment on the proposed expansion project. (Round your percentage answer to 2 decimal places, (1.e. 0.1234 should be entered as 12.34%.)) Return on investment of Proposed Expansion Project 8.99% Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Reg 3 Req 4A Reg 4B Reg 5 Reg 6 Is this an acceptable project? Is this an acceptable project? Yes Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Reg 3 Reg 4A Reg 48 Reas Reg 6 Without any additional calculations, state whether the proposed project would increase or decrease each division's ROI. Division Division B Division C Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Reg 3 Reg 4 Reg 4B Reg 5 Reg 6 Compute the new ROI and residual income for each division if the project was implemented within that division. (LOSS amounts should be entered with a minus sign. Enter your ROI percentage answers to 2 decimal places, (i.e., 0.1234 should be entered as 12.34%.)) ROI Residual Income (Loss) % Division A Division B Division % %

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