Capital Investments has two divisions. Each division's required rate of return is 10%. Planned operating results for 2020 are as follows: (Click the icon to view the planned operating results.) Read the requirements. Requirement a. What is the current ROI for each division? Begin by selecting the formula to calculate ROI, then compute the ROI for each division. Division A Division B + + + = = ROI % %

Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter10: Evaluating Decentralized Operations
Section: Chapter Questions
Problem 11E: The operating income and the amount of invested assets in each division of Conley Industries are as...
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Data table
Division
A
B
Operating income
$ 12,350,000
$ 10,640,000
Investment
$ 95,000,000
$ 56,000,000
X
Transcribed Image Text:Data table Division A B Operating income $ 12,350,000 $ 10,640,000 Investment $ 95,000,000 $ 56,000,000 X
Capital Investments has two divisions. Each division's required rate of return is 10%. Planned operating results for 2020 are as follows:
(Click the icon to view the planned operating results.)
Read the requirements.
Requirement a. What is the current ROI for each division?
Begin by selecting the formula to calculate ROI, then compute the ROI for each division.
Division A
Division B
+
+
||
=
||
ROI
%
%
Transcribed Image Text:Capital Investments has two divisions. Each division's required rate of return is 10%. Planned operating results for 2020 are as follows: (Click the icon to view the planned operating results.) Read the requirements. Requirement a. What is the current ROI for each division? Begin by selecting the formula to calculate ROI, then compute the ROI for each division. Division A Division B + + || = || ROI % %
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Capital Investments has two divisions. Each division's required rate of return is 10%. Planned operating results for 2020 are as follows:
(Click the icon to view the planned operating results.)
Read the requirements.
Requirement a. What is the current ROI for each division?
Begin by selecting the formula to calculate ROI, then compute the ROI for each division.
Measure of income
+ Measure of investment =
12,350,000
95,000,000
56,000,000
10,640,000
Division A
Division B
Division A
Division B
Requirement b. What is the current residual income for each division?
Begin by selecting the formula to calculate the residual income (RI), then compute the RI for each division.
X
ROI
X
13 %
19 %
%
%
)=
RI
Transcribed Image Text:Capital Investments has two divisions. Each division's required rate of return is 10%. Planned operating results for 2020 are as follows: (Click the icon to view the planned operating results.) Read the requirements. Requirement a. What is the current ROI for each division? Begin by selecting the formula to calculate ROI, then compute the ROI for each division. Measure of income + Measure of investment = 12,350,000 95,000,000 56,000,000 10,640,000 Division A Division B Division A Division B Requirement b. What is the current residual income for each division? Begin by selecting the formula to calculate the residual income (RI), then compute the RI for each division. X ROI X 13 % 19 % % % )= RI
Data table
Division
A
B
Operating income
$ 12,350,000
$ 10,640,000
Investment
$ 95,000,000
$ 56,000,000
X
Transcribed Image Text:Data table Division A B Operating income $ 12,350,000 $ 10,640,000 Investment $ 95,000,000 $ 56,000,000 X
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