Question: Exercise 9-8 Computing and Interpreting Return on Investment (ROI) [LO9-1] Selected operating data for two divisions of Outback Brewing, Ltd., of Australia are given below:
Exercise 9-8 Computing and Interpreting Return on Investment (ROI) [LO9-1]
| Selected operating data for two divisions of Outback Brewing, Ltd., of Australia are given below: |
| Division | ||||
| Queensland | New South Wales | |||
| Sales | $ | 1,003,000 | $ | 1,891,000 |
| Average operating assets | $ | 590,000 | $ | 610,000 |
| Net operating income | $ | 90,270 | $ | 113,460 |
| Property, plant, and equipment (net) | $ | 242,000 | $ | 192,000 |
| Required: | |
| 1. | Compute the rate of return for each division using the return on investment (ROI) formula stated in terms of margin and turnover. (Round your Turnover answers to 2 decimal places. Round your Margin and ROI percentage answers to 2 decimal places (i.e., 0.1234 should be entered as 12.34).) |
| 2. | Which divisional manager seems to be doing the better job? | ||||
|
Step by Step Solution
There are 3 Steps involved in it
1 Expert Approved Answer
Step: 1 Unlock
Question Has Been Solved by an Expert!
Get step-by-step solutions from verified subject matter experts
Step: 2 Unlock
Step: 3 Unlock
Study Help