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Author Question: Capital Investments has three divisions. Each division's required rate of return is 15%. Planned ... (Read 156 times)

Alygatorr01285

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on: Mar 6, 2021
Capital Investments has three divisions. Each division's required rate of return is 15%. Planned operating results for 2015 are as follows: 

DivisionOperating incomeInvestment
A$15,000,000$100,000,000
B$25,000,000$125,000,000
C$11,000,000$ 50,000,000
The company is planning an expansion, which will require each division to increase its investments by $25,000,000 and its income by $4,500,000. 

Required:
a.  Compute the current ROI for each division. 

b.  Compute the current residual income for each division. 

c.  Rank the divisions according to their current ROIs and residual incomes. 

d.  Determine the effects after adding the new project to each division's ROI and residual income. 

e.  Assuming the managers are evaluated on either ROI or residual income, which divisions are pleased with the expansion and which ones are unhappy?
Horngren's Cost Accounting: A Managerial Emphasis ¦ Datar, Rajan ¦ 16th Edition
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Marked as best answer by Alygatorr01285 on Mar 6, 2021

diana chang

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Reply #1 on: Mar 6, 2021
Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.
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Alygatorr01285

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Reply 2 on: Mar 6, 2021
Gracias!

diana chang

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Reply 3 on: Yesterday
YES! Correct, THANKS for helping me on my review

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