Question

Refer to the Racer Sports Data Set. Compute each division’s RI. Interpret your results. Are your results consistent with each division’s ROI?
Racer Sports Company makes snowboards, downhill skis, cross-country skis, skateboards, surfboards, and in-line skates. The company has found it beneficial to split operations into two divisions based on the climate required for the sport: Snow Sports and Non-Snow Sports. The following divisional information is available for the past year:
Racer’s management has specified a target 15% rate of return. The company’s weighted average cost of capital (WACC) is 12%, and its effective tax rate is 35%.


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  • CreatedApril 30, 2015
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