It is the end of the third quarter, and Kimberly is evaluating the performance of two...

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It is the end of the third quarter, and Kimberly is evaluating the performance of two key divisions in the company. Both divisions had $51,000 cash available for investment in the fourth quarter, so Kimberly is now analyzing each division before a potential investment. She has gathered the following condensed income statements and selected information from the balance sheet for each division. The company's minimum required rate of return is 10%, while its weighted average cost of capital is 9%. Its effective tax rate is 25% East West Sales COGS $910,000 $1,100,000 380,000 660,000 Gross margin $530,000 $440,000 Operating expenses 490,000 400,000 Operating income $40,000 $40,000 Operating assets $800,000 $500,000 Total assets $1,100,000 $830,000 Current liabilities $150,000 $45,000 (a) Your answer is correct. Calculate the current ROI, RI, and EVA for each division through the third quarter. For ROI purposes, operating assets are considered investments. (Enter ROI as a decimal, not as a percentage. Round ROI to 4 decimal places, e.g. 0.1526. Enter negative amounts with either a-sign e.g. -15,000 or in parenthesis e.g. (15,000).) (b) ROI East .05 West .08 RI $ -40000 $ -10000 EVA $ eTextbook and Media -55500 $ -40650 * Your answer is incorrect. Attempts: 1 of 3 used How much would each division need to generate in new operating income in the fourth quarter to reach the company's desired ROI of 11% at year-end, assuming each division uses its available $51,000 to purchase a new investment? Assume it is a $51,000 nondepreciable asset but still included in operating assets. Fourth quarter operating income needed $ eTextbook and Media Save for Later East 62120 $ West 26120 Attempts: 1 of 3 used Submit Answer It is the end of the third quarter, and Kimberly is evaluating the performance of two key divisions in the company. Both divisions had $51,000 cash available for investment in the fourth quarter, so Kimberly is now analyzing each division before a potential investment. She has gathered the following condensed income statements and selected information from the balance sheet for each division. The company's minimum required rate of return is 10%, while its weighted average cost of capital is 9%. Its effective tax rate is 25% East West Sales COGS $910,000 $1,100,000 380,000 660,000 Gross margin $530,000 $440,000 Operating expenses 490,000 400,000 Operating income $40,000 $40,000 Operating assets $800,000 $500,000 Total assets $1,100,000 $830,000 Current liabilities $150,000 $45,000 (a) Your answer is correct. Calculate the current ROI, RI, and EVA for each division through the third quarter. For ROI purposes, operating assets are considered investments. (Enter ROI as a decimal, not as a percentage. Round ROI to 4 decimal places, e.g. 0.1526. Enter negative amounts with either a-sign e.g. -15,000 or in parenthesis e.g. (15,000).) (b) ROI East .05 West .08 RI $ -40000 $ -10000 EVA $ eTextbook and Media -55500 $ -40650 * Your answer is incorrect. Attempts: 1 of 3 used How much would each division need to generate in new operating income in the fourth quarter to reach the company's desired ROI of 11% at year-end, assuming each division uses its available $51,000 to purchase a new investment? Assume it is a $51,000 nondepreciable asset but still included in operating assets. Fourth quarter operating income needed $ eTextbook and Media Save for Later East 62120 $ West 26120 Attempts: 1 of 3 used Submit Answer