Question

Marriott International, Inc., provides lodging services around the world. The company is organized into the following five segments:
• North American—Full Service: Marriott and Renaissance Hotels.
• North American—Limited Service: Courtyard, Fairfield, SpringHill Suites, and Residence Hotels.
• International: Hotels outside of North America.
• Luxury: The Ritz-Carlton, Bulgari, and Edition Hotels.
• Timeshare: Marriott Vacation Club, The Ritz-Carlton Destination and The Ritz-Carlton Residences.
Financial information for each segment taken from a recent annual report is as follows (in millions):


a. Use the DuPont formula to determine the return on investment for each of the Marriott business divisions. Round profit margin to one decimal place and investment turnover to two decimal places.
b. Determine the residual income for each division, assuming a minimum acceptable income of 10% of total assets. Round minimal acceptable return to the nearest million dollars.
c. Interpret yourresults.


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  • CreatedFebruary 04, 2014
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