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 DIVISION Division Divisioncm Sales revenue $ 1,235,000 5 1,186,000 5 1,206,000 Cost of goods sold 763,000 871.000 876.000 Miscellaneous operating expenses. 78,000 66,00 67,000 Interest and taxes 62,000 55,000 55,000 Average invested assets 10,722,000 2,568,000 4,255,000 Wescott is considering an expansion project in the upcoming year that will cost $6.7 million and return $598.000 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. 4-6. Compute the return on investment on the proposed expansion project 4-6. 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 1 Reg 2 Reg Reg 4A Reg 48 Reg 5 Reg 6 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 4-0. 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 ROL 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 5 Reg 1 Reg 2 Reg 4A Req 4B Reg 6 Req3 without any additional calculations, state whether the proposed project would increase or decrease each division's ROL Division A Division B Division 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-a. 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. Req5 Reg 6 Reg 2 Reg 4A Req 40 Reg 1 Req3 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, (.e., 0.1234 should be entered as 12.34%.)) ROI Residual Income (Loss) % Division A Division B Division C
