Question

The Campus Division of All-Stales Bank has assets of $1,600 milion. During the past year, the division had profits of 300 mil
0 0
Add a comment Improve this question Transcribed image text
Answer #1

A) divisional ROI = Profit/operating assets

= 300/1600

= 18.8%

​​​​​​.

B) Divisional RI = Profit - Required return

= 300 - (1600*9%)

= 156,000,000

Add a comment
Know the answer?
Add Answer to:
The Campus Division of All-Stales Bank has assets of $1,600 milion. During the past year, the division had profits...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • The Campus Division of All-States Bank has assets of S2,100 million. During the past year, the...

    The Campus Division of All-States Bank has assets of S2,100 million. During the past year, the division had profits of $325 million. All-States Bank has a cost of capital of 8 percent. Ignore taxes. Required a. Compute the divisional ROI for the Campus Division. Enter your answer as a percentage rounded to 1 decimal place (i.e., 32.1).) Divisional RO b. Compute the divisional RI for the Campus Division. (Enter your answer in dollars, not in millions.) Divisional Rl

  • The Campus Division of All-States Bank has assets of $1,900 million. During the past year, the...

    The Campus Division of All-States Bank has assets of $1,900 million. During the past year, the division had profits of $315 million. All-States Bank has a cost of capital of 6 percent. Ignore taxes. Required: a. Compute the divisional ROI for the Campus Division. (Enter your answer as a percentage rounded to 1 decimal place (i.e., 32.1).) b. Compute the divisional RI for the Campus Division (Enter your answer in dollars, not in millions.)

  • The Campus Division of All-States Bank has assets of $2,800 million. During the past year, the...

    The Campus Division of All-States Bank has assets of $2,800 million. During the past year, the division had profits of $275 million. All-States Bank has a cost of capital of 5 percent. Ignore taxes. Required: a. Compute the divisional ROI for the Campus Division. (Enter your answer as a percentage rounded to 1 decimal place (i.e., 32.1).) b. Compute the divisional RI for the Campus Division. (Enter your answer in dollars, not in millions.)

  • The Campus Division of All-States Bank has assets of $1,500 million. During the past year, the...

    The Campus Division of All-States Bank has assets of $1,500 million. During the past year, the division had profits of $295 million. All-States Bank has a cost of capital of 8 percent. Ignore taxes. Required: a. Compute the divisional ROI for the Campus Division. (Enter your answer as a percentage rounded to 1 decimal place (i.e., 32.1).) b. Compute the divisional RI for the Campus Division. (Enter your answer in dollars, not in millions.)

  • Check my work Harbor Division has total assets (net of accumulated depreciation) of $720,000 at the...

    Check my work Harbor Division has total assets (net of accumulated depreciation) of $720,000 at the beginning of year 1. One of the assets is a machine that has a net book value of $61,000. Expected divisional income in year 1 is $87,000 including $5,000 in income generated by the machine (after depreciation). Harbor's cost of capital is 11 percent. Harbor is considering disposing of the asset today (the beginning of year 1). points Skipped eBook Required: a. Harbor computes...

  • Oscar Clemente is the manager of Forbes Division of Pitt, Inc., a manufacturer of biotech products....

    Oscar Clemente is the manager of Forbes Division of Pitt, Inc., a manufacturer of biotech products. Forbes Division, which has $4.05 million in assets, manufactures a special testing device. At the beginning of the current year, Forbes invested $5.12 million in automated equipment for test machine assembly. The division’s expected income statement at the beginning of the year was as follows: Sales revenue $ 16,060,000 Operating costs Variable 2,100,000 Fixed (all cash) 7,660,000 Depreciation New equipment 1,560,000 Other 1,330,000 Division...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT