Envision Company has a target return on capital of 12 percent. The following financial information is available for October ($ thousands):

	Software Division		Consulting Division		Venture Capital Division
	(Value Base)		(Value Base)		(Value Base)
	Book	Current	Book	Current	Book	Current
Sales	$100,000	$100,000	$200,000	$200,000	$800,000	$800,000
Income	12,250	11,700	16,400	20,020	56,730	51,920
Assets	70,000	90,000	100,000	110,000	610,000	590,000
Liabilities	10,000	10,000	14,000	14,000	40,000	40,000

Required
a. Compute the return on investment using both book and current values for each division.

Round answers to three decimal places.

	Book Value	Current Value
Software
Consulting
Venture Capital

b. Compute the residual income for both book and current values for each division.
Use negative signs with answers, when appropriate.

	Book Value	Current Value
Software
Consulting
Venture Capital

c. Compute the economic value added income for both book and current values for each division if the tax rate is 30 percent and the weighted average cost of capital is 10 percent.

Use negative signs with answers, when appropriate.

	Book Value	Current Value
Software
Consulting
Venture Capital

Answer rating: 100% (QA)

a Computing the return on investment ROI using both book and current values for each division ROI is ... View the full answer