Wellness Pharmaceuticals is a small firm specializing in new products It is organized into two divisions, based on the products they produce BD Division is smaller and the life of the products it produces tend to be shorter than those produced by the larger PM Division Selected financial data for the past year is shown below Divisional investment is as of the beginning of the year Wellness Pharmaceuticals uses a 9 percent cost of capital and beginning of the year investment when computing ROI and residual income Ignore income taxes e building The following information (in $000s) appears in the accounting records for last year BD Division PM Division Allocated Corporate Overhead $660 $1,980 Cost of Goods Sold 3,520 7,700 Divisional Investment 9,900 88,000 Research and Development 2,200 3,960 Sales 8,800 2,200 SG A 770 1,683 REQUIRED 3 Calculate ROI for the two divisions 4 Compute residual income for the two divisions

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Wellness Pharmaceuticals is a small firm specializing in new products  It is organized into two divisions, based on the products they produce  BD Division is smaller and the life of the products it produces tend to be shorter than those produced by the larger PM Division  Selected financial data for the past year is shown below  Divisional investment is as of the beginning of the year  Wellness Pharmaceuticals uses a 9 percent cost of capital and beginning of the year investment when computing ROI and residual income  Ignore income taxes e building  The following information (in $000s) appears in the accounting records for last year  BD Division PM Division Allocated Corporate Overhead $660 $1,980 Cost of Goods Sold 3,520 7,700 Divisional Investment 9,900 88,000 Research and Development 2,200 3,960 Sales 8,800 2,200 SG A 770 1,683 REQUIRED 3  Calculate ROI for the two divisions  4  Compute residual income for the two divisions

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Wellness Pharmaceuticals is a small firm specializing in new products. It is organized into two divisions, based on the products they produce. BD Division is

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Wellness Pharmaceuticals is a small firm specializing in new products. It is organized into two divisions, based on the products they produce. BD Division is smaller and the life of the products it produces tend to be shorter than those produced by the larger PM Division. Selected financial data for the past year is shown below. Divisional investment is as of the beginning of the year. Wellness Pharmaceuticals uses a 9 percent cost of capital and beginning-of-the-year investment when computing ROI and residual income. Ignore income taxes.e building. The following information (in $000s) appears in the accounting records for last year:

	BD Division	PM Division
Allocated Corporate Overhead	$660	$1,980
Cost of Goods Sold	3,520	7,700
Divisional Investment	9,900	88,000
Research and Development	2,200	3,960
Sales	8,800	2,200
SG&A	770	1,683

REQUIRED











3. Calculate ROI for the two divisions.






4. Compute residual income for the two divisions.