Capital Investments has two divisions. Each division's required rate of return is 15%. Planned operating results...
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Capital Investments has two divisions. Each division's required rate of return is 15%. Planned operating results for 2017 are as follows: (Click the icon to view the planned operating results.) Read the requirements. Requirement a. What is the current ROI for each division? Begin by selecting the formula to calculate ROI, then compute the ROI for each division. Division A Division B Division A Division B Requirement b. What is the current residual income for each division? Begin by selecting the formula to calculate the residual income (RI), then compute the RI for each division. Division A Division B When considering residual income, ROI -( % % % % Requirement c. Capital is planning an expansion that will require each division to increase its investments by $25,000,000 and its income by $4,500,000. Assuming the managers are evaluated on either ROI or residual income, which division (if either) is pleased with the expansion? Begin by calculating the revised ROI and RI for each division. (Round each percentage to the nearest tenth percent, XX%.) ROI RI RI the expansion. When ROI is considered, the expansion. i More Info Division A B Operating income $ 15,000,000 $ 11,000,000 Print Done Investment 100,000,000 50,000,000 - Capital Investments has two divisions. Each division's required rate of return is 15%. Planned operating results for 2017 are as follows: (Click the icon to view the planned operating results.) Read the requirements. Requirement a. What is the current ROI for each division? Begin by selecting the formula to calculate ROI, then compute the ROI for each division. Division A Division B Division A Division B Requirement b. What is the current residual income for each division? Begin by selecting the formula to calculate the residual income (RI), then compute the RI for each division. Division A Division B When considering residual income, ROI -( % % % % Requirement c. Capital is planning an expansion that will require each division to increase its investments by $25,000,000 and its income by $4,500,000. Assuming the managers are evaluated on either ROI or residual income, which division (if either) is pleased with the expansion? Begin by calculating the revised ROI and RI for each division. (Round each percentage to the nearest tenth percent, XX%.) ROI RI RI the expansion. When ROI is considered, the expansion. i More Info Division A B Operating income $ 15,000,000 $ 11,000,000 Print Done Investment 100,000,000 50,000,000 -
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Ans1 ROI Operating income Investment Division A 15000000 100000000 015 or 15 Division B 11000000 5... View the full answer
Related Book For
Federal Taxation 2018 Comprehensive
ISBN: 9780134532387
31st Edition
Authors: Thomas R. Pope, Timothy J. Rupert, Kenneth E. Anderson
Posted Date:
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