Wescott Company has three divisions: A, B, and 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 $ 1,100,000 $ 1,091,000 $1,096,00 803,000 801,000 796,000 73,000 61,000 62,600 57,000 50,000 50,000 9,857,000 2,353,000 3,870,000 Wescott is considering an expansion project in the upcoming year that will cost $5.9 million and return $543,000 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-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 of the project was implemented within that 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. Reg 2 Reg 6 Req 43 Req A Req3 Reg 1 Reg 5 Compute the ROI for each division. (Do not round your intermediate calculations. Round your percentage answer to 2 decimal places, (i.e. 0.1234 should be entered as 12.34%.)) ROI Division A Division B Division % Req 2 > Complete this question by entering your answers in the tabs below. Req 1 fe42 Reg 3 Req 4A Req 48 Req 5 Reg 6 Compute the residual income for each division. (Loss amounts should be indicated by a minus sign.) Residual income (Loss) Division A Division B Division C Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 4P Req 4A Req 4B Req 5 Reg 6 Rank the divisions according to the ROI and residual income of each. Rank Division A Division B Division C PULLE PUHUL VII Complete this question by entering your answers in the tabs below. Req: Reg 2 Req3 Req 4A Req 40 Reqs Reg 6 Compute the return on investment on the proposed expansion project. (Round your percentage answer to 2 decimal places, (i.e. 0.1234 should be entered as 12.34%.)) Return on Investment of Proposed Expansion Project Complete this question by entering your answers in the tabs below. Req 1 Reg 2 Reg 3 Req 4A Req 4B Req 5 Req 6 Without any additional calculations, state whether the proposed project would trease or decrease each di- Division A Division B Division C
