29. The Global Products Corporation has three subsidiaries. Heavy Machinery Electronics Medical Supplies $20,040,000 $5,980,000 $4,730,000 Sales 1,700,000 592,000 402,000 Net income (after taxes) 8,340,000 8,760,000 3,570,000 Assets a. Which division has the lowest return on sales? b. Which division has the highest return on assets? Compute the return on assets for the entire corporation. C.
29. The Global Products Corporation has three subsidiaries. Heavy Machinery Electronics Medical Supplies $20,040,000 $5,980,000 $4,730,000 Sales 1,700,000 592,000 402,000 Net income (after taxes) 8,340,000 8,760,000 3,570,000 Assets a. Which division has the lowest return on sales? b. Which division has the highest return on assets? Compute the return on assets for the entire corporation. C.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:29. The Global Products Corporation has three subsidiaries.
Analysis by divisions
(LO3-2)
Medical Supplies
Heavy Machinery
Electronics
$20,040,000
$5,980,000
$4,730,000
Sales
Net income (after taxes) ...
1,700,000
592,000
402,000
8,340,000
8,760,000
3,570,000
Assets
а.
Which division has the lowest return on sales?
b.
Which division has the highest return on assets?
c. Compute the return on assets for the entire corporation.
d. If the $8,760,000 investment in the heavy machinery division is sold off and
redeployed in the medical supplies subsidiary at the same rate of return on
assets currently achieved in the medical supplies division, what will be the
new return on assets for the entire corporation?
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