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Warren Company has two divisions with the following results: Sales revenue Divisional expenses Segment income Average invested assets Ashland $ 444,000 $ 264,000 $ 180,000
Warren Company has two divisions with the following results: Sales revenue Divisional expenses Segment income Average invested assets Ashland $ 444,000 $ 264,000 $ 180,000 $1,140,000 Erie $1,140,000 $ 844,000 $ 344,000 $3,940,000 Warren Company has a hurdle rate of 11.4%. a. Calculate the return on investment for each division. (Round your answers to 2 decimal places.) Return on investment E 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 lo 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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