Compute the return on investment roi for each division, Ask an Expert

Management Studies

Selected sales and operating data for three divisions of three different companies are given below:

Division X Division Y Division Z

Sales $900,000 $750,000 $600,000

Average operation assets $600,000 $150,000 $200,000

Net operating income $ 54,000 $ 30,000 $ 10,000

Minimum required rate 10% 16% 8% of return

a. Compute the return on investment (ROI) for each division using the formula stated in terms of margin and turnover. Show computations.

b. Compute the residual income for each division. Show computations.

c. Under which of these methods would they accept an opportunity with a 15 percent return. Show computations and details.

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Business Management, Management Studies

Category:- Business Management
Reference No.:- M9102412

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