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You have the following incomplete information about Hue Corp.'s Magenta and Fuschia divisions: Sales Operating income Average operating assets Margin Turnover Return on investment (ROI)

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You have the following incomplete information about Hue Corp.'s Magenta and Fuschia divisions: Sales Operating income Average operating assets Margin Turnover Return on investment (ROI) Magenta $800,000 S64,000 A B Fuschia D E $220,000 5% 4.5 16% F A S B C Required: a. Complete the missing information for each of the divisions: 6 marks Average operating assets for Magenta Division % Margin for Magenta Division Turnover for Magenta Division is times. Sales for Fuschia Division Operating income for Fuschia Division % Return on investment for Fuschia Division b. Assume Magenta Division has a minimum required rate of return of 12%. Based on this informatio and your calculations above, determine Magenta Division's residual income. 2 marks D S E S F C. Assume that Magenta Division has an investment opportunity that would yield a rate of return of 13%. If the division manager's performance is being measured ROI, is she likely to accept the opportunity? Why or why not? 2 marks

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