Question

. Emin Chapter 12 Question The following data portanto the live De o Rompe Co Divisional tribution margin Profit in controllable by the divisional manager Profilin e to the division 9440 The crys h e evaluating performan dive manager is completing the following the events. He can dime A. Calculate the Robot s What is the division manager's curmet ROLcomputed by wing posibility C. Which of the throw thei divisional performance, asjade by ROT Why DIf Kemper has an impuriod in charge of computers inmont trover's Di ger is valid by r ich levement e frem Kompo's perspective Why Quest 2 Jasper Compos and at year i , and w e ted have There was Last year the wall opportunity t Manager of Jap's lowa Division only died an in the dough Relevato S100.000 Imusted pital SOOOOOOO 3 0.000.000 Required A. Compute the cr e w and Bharat instreamlaal panai 'RO கோடியாக D. Acealer inc e perea minimum de capital. Compute the commenta ire of the low Did the defender man likely change d toward the Wb

Answer 1

Question 1
1)	Division 1	Division 2	Division 3
Income (A)	$   50,000.00	$   54,000.00	$   96,000.00
Cost (B)	$ 250,000.00	$ 300,000.00	$ 400,000.00
ROI = (A)/(B)	20.00%	18.00%	24.00%
2)
ROI = Controllable profit margin ($320,000) ÷asset investment ($1,280,000) =	25.00%
3) None, as all will lower the current ROI
4)
Residual income: $96,000 - ($400,000 ×22%) =	$     8,000.00
This investment is attractive from both Oliver and Kemper's perspectives. The positive residual income indicates that the investment income covers the imputed interest charge