Question: please write a correct solutions Problem 7: The ABC company has three divisions - A, B and C. Division A is exclusively a marketing division,

please write a correct solutions Problem 7: The

please write a correct solutions

Problem 7: The ABC company has three divisions - A, B and C. Division A is exclusively a marketing division, Division B is exclusively a manufacturing division and Division C is both a manufacturing and marketing division. The following are the financial facts of each of these divisions: Division A Division B Current assets Division C 1,00,000 1,00,000 Fixed assets 31,00,000 10,00,000 5,00,000 Total assets 1,00,000 11,00,000 6,00,000 Profits before dep. & mktg. Dev. Costs 2,00,000 2,00,000 2,00,000 Required: Assume that the ABC company depreciates fixed assets on a straight line basis over 10 years . To maintain its markets and productive facilities, it has to invest ? 1,00,000 per year in market development in division A and 50,000 per year in division C. This is written off as an expense. It has to replace 10% of its productive facilities each year. Under these equilibrium conditions, what are the annual rates of return earned by each of the division

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related General Management Questions!

U View Problem 7: The ABC company has three divisions - A, B and C Division A is exclusively in marketing division, Division B is exclusively a manufacturing division and Division C is both a...

please write a correct solutions components COM 21, it manufactures at a price which would fetch a return of 25% on the average Problem 6: Division A of Better Margins Ltd. has been given a budgeted...

Need solutions to the following problems. Please provide spreadsheet. *Exercise 22-15 (part level submission) Deitz Inc. has three divisions which are operated as profit centers. Actual operating...

i am taking Cooperate finance which is FIN222 can help me to answer.. ? Tutorial 1 Topic 1 Chapter 1 4. What are the main advantages and disadvantages of organising a firm as a corporation? 6. You...

BLEES Inc. (BLEES) manufactures leather jackets and leather bags for various designers. The company has three divisions - a jacket division, bag division and leather division. The jacket and bag...

please write a correct answer sets on replacement cost basis. Problem 5: Osaka Corporation is a decentralized manufacturing company with three producing divisions. Following is a schedule of sales...

Activity Based Costing (ABC) Background Information: Nick's Woodworking Inc. began operations in 2023 as a manufacturer of picnic tables with attached benches. During its first decade of operations,...

M4 Assignment: Leadership Behavior You have been hired by Doris Ann Riley, the head of HR for King Conductors to analyze a management/leadership situation. She is concerned with what she is hearing...

A new private hospital of 100 beds was opened to receive patients on 2 January though many senior staff members including the supervisor of the laundry department had been in situ for some time...

On June 20, 2007, John Authers, investment editor of the Financial Times, wrote the following in his column The Short View: The Bank of England published minutes showing that only the narrowest...

The interest rate risk of a bond is None of the above the untytemotic riti coused by foctors unique to the bond The risk that orises from the uncertainty of the bonds return coused by changes in...

atch the compensation objectives with their meanings. Efficiency Efficiency drop zone empty. Fairness Fairness drop zone empty. Compliance Compliance drop zone empty. Improving performance and...