Consider the following data (in thousands): 1. For each division, compute the return on sales, the capital

Question:

Consider the following data (in thousands):

1. For each division, compute the return on sales, the capital turnover, and the return on investment (ROI).

2. Which division is the best performer if evaluation is based on ROI? Explain.

3. Suppose each division is assessed a cost of capital of 10% on invested capital. Compute the economic profit for each division. Which division is the best performer based on economic profit? Explain.

Cost Of Capital
Cost of capital refers to the opportunity cost of making a specific investment . Cost of capital (COC) is the rate of return that a firm must earn on its project investments to maintain its market value and attract funds. COC is the required rate of...