For this assignment, you will be calculating return on investment, margin, turnover, residual income, and economic value added ratios for two divisions of the same company.

Directions:

A company has two divisions with the following information:

Division 1

Sales:	2,000,000
Operating Income:	400,000
Assets Jan. 1:	4,000,000
Assets Dec. 31:	4,500,000

Division 2

Sales:	1,000,000
Operating Income:	300,000
Assets Jan. 1:	2,000,000
Assets Dec. 31:	2,200,000

The Minimum required rate of return for the company for all of its divisions is 30% and its cost of capital is 15%. The company has an income tax rate of 40%. Calculate the following ratios for both divisions:

1. Return on Investment
2. Margin
3. Turnover
4. Residual income
5. Economic Value Added