Century Plaza Enterprises has three subsidiaries: a. Which subsidiary has the lowest return on sales? b. Which

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Century Plaza Enterprises has three subsidiaries:

Caledon Grand Vista Bronte Sales $16,000,000 1,000,000 $4,000,000 $8,000,000 Net income after tax Assets 160,000 600,000

a. Which subsidiary has the lowest return on sales?
b. Which subsidiary has the highest ROA?
c. Calculate the ROA for the whole company.

d. If Century Plaza sells the $5,000,000 investment in Caledon and reinvests same amount in Grand Vista at the same rate of ROA as currently in Grand Vista, calculate the new ROA for the whole company.

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Foundations of Financial Management

ISBN: 978-1259024979

10th Canadian edition

Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta

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Question Posted: Sep 08, 2018 12:38 PM

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Century Plaza Enterprises has three subsidiaries: a. Which subsidiary has the lowest return on sales? b. Which

Question:

Caledon Grand Vista Bronte Sales $16,000,000 1,000,000 $4,000,000 $8,000,000 Net income after tax Assets 160,000 600,000 5,000,000 5,000,000 2,000,000

Step by Step Answer:

a Century Plaza Enterprises Grand Vista Bronte Caledon Net incomeSales 625 40 750 ...View the full answer

Foundations of Financial Management

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