Required 1 Required 2 Compute the return on investment for each division. (Enter your ROI answers as a percentage rounded to two decimal places, (i.e., 0.1234 should be entered as 12.34%.)) Peak View Grand Return on Investment % Required 1 Required 2 Compute the residual income for each division. (Loss amounts should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to nearest whole dollar.) Peak View Grand Residual Income (Loss)

Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter10: Evaluating Decentralized Operations
Section: Chapter Questions
Problem 4BE: Profit margin, investment turnover, and ROI Briggs Company has operating income of 36,000, invested...
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Luke Company has three divisions: Peak, View, and Grand. The company has a hurdle rate of 6.51 percent. Selected operating data for the three divisions follow:
 

    Peak   View   Grand
Sales revenue $ 342,000 $ 230,000 $ 312,000
Cost of goods sold   202,000   108,000   199,000
Miscellaneous operating expenses   43,000   37,000   37,000
Average invested assets   1,350,000   930,000   1,095,000
 


Required:
1. Compute the return on investment for each division. (Enter your ROI answers as a percentage rounded to two decimal places, (i.e., 0.1234 should be entered as 12.34%.))
2. Compute the residual income for each division.  (Loss amounts should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to nearest whole dollar.)

 

 

 

Required 1
Required 2
Compute the return on investment for each division. (Enter your ROI answers as a percentage rounded to two decimal places,
(i.e., 0.1234 should be entered as 12.34%.))
Peak
View
Grand
Return on Investment
%
Transcribed Image Text:Required 1 Required 2 Compute the return on investment for each division. (Enter your ROI answers as a percentage rounded to two decimal places, (i.e., 0.1234 should be entered as 12.34%.)) Peak View Grand Return on Investment %
Required 1
Required 2
Compute the residual income for each division. (Loss amounts should be indicated by a minus sign. Do not round intermediate
calculations. Round your answers to nearest whole dollar.)
Peak
View
Grand
Residual Income (Loss)
Transcribed Image Text:Required 1 Required 2 Compute the residual income for each division. (Loss amounts should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to nearest whole dollar.) Peak View Grand Residual Income (Loss)
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