At the end of Year 2, the manager of the Canned Foods Division is concerned about...
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At the end of Year 2, the manager of the Canned Foods Division is concerned about the division's performance. As a result, he is considering the opportunity to invest in two independent projects. The first is juice boxes for elementary school children. The second is fruit and veggie pouches for kids on the go. Without the investments, the division expects that Year 2 data will remain unchanged. The expected operating incomes and the outlay required for each investment are as follows: Juice Box Fruit Pouch $28,000 200,000 $15,000 150,000 Operating income Outlay Allard's corporate headquarters has made available up to $540,000 of capital for this division. Any funds not invested by the division will be retained by headquarters and invested to earn the company's minimum required rate of return, 8 percent. < Required: Round your answers to four decimal places before converting to a percentage. For example, .06349 would be rounded to .0635 and entered as "6.35" percent. 1. Compute the ROI for each investment. Juice Box ROI Fruit Pouch ROI % % 2. Compute the divisional ROI for each of the following four alternatives: a. The juice box is added. % ? At the end of Year 2, the manager of the Canned Foods Division is concerned about the division's performance. As a result, he is considering the opportunity to invest in two independent projects. The first is juice boxes for elementary school children. The second is fruit and veggie pouches for kids on the go. Without the investments, the division expects that Year 2 data will remain unchanged. The expected operating incomes and the outlay required for each investment are as follows: Juice Box Fruit Pouch $28,000 200,000 $15,000 150,000 Operating income Outlay Allard's corporate headquarters has made available up to $540,000 of capital for this division. Any funds not invested by the division will be retained by headquarters and invested to earn the company's minimum required rate of return, 8 percent. < Required: Round your answers to four decimal places before converting to a percentage. For example, .06349 would be rounded to .0635 and entered as "6.35" percent. 1. Compute the ROI for each investment. Juice Box ROI Fruit Pouch ROI % % 2. Compute the divisional ROI for each of the following four alternatives: a. The juice box is added. % ?
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To compute the ROI Return on Investment for each investment we need to divide the operating income by the outlay and express the result as a percentag... View the full answer
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