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Warren Company has two divisions with the following results: Sales revenue Divisional expenses Segment income Average invested assets Ashland $ 456,000 $ 276,000 $ 180,000
Warren Company has two divisions with the following results: Sales revenue Divisional expenses Segment income Average invested assets Ashland $ 456,000 $ 276,000 $ 180,000 $1,260,000 Erie $1,260,000 $ 856,000 $ 356,000 $4,060,000 Warren Company has a hurdle rate of 12.6%. a. Calculate the return on investment for each division. (Round your answers to 2 decimal places.) Return on investment Ashland Erie b. Break each division's return on investment down into its component parts using the DuPont method. (Round your profit margin to 2 decimal places and investment turnover to 3 decimal places.) Profit margin Investment Turnover Ashland Erie c. Calculate the residual income for each division. (Negative amounts should be indicated by a minus sign.) Residual Income Ashland Erie
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