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Gately Clothiers have provided you with the below dashboard demonstrating the performance for two of their divisions. They are looking to see if they should introduce new technology that will add $150,000 in operating income for each division while adding $1,000,000 in new investments that the two divisions will split evenly. They have also told you that their current hurdle rate is 13%. Residual Income Comparison $100,000 $50,000 $0 Pants ROI Comparison 20.0% 15.0% 10.0% 5.0% 0.0% +ableau Required: Residual Income Pants Shirts Pants ROI ROI w/ New Tech ROI Residual Income w/ New Tech Shirts ← Shirts Division Pants Shirts ROI w/ New Tech Ко 回 1-a. Input each division's return on investment (ROI) and residual income for last year (before implementing the new technology). 1-b. Determine which manager seems to be performing better before implementing the new technology. 2. Input each division's return on investment (ROI) and residual income for last year (after implementing the new technology). 3. Determine whether each manager will support the investment.

Gately Clothiers have provided you with the below dashboard demonstrating the performance for two of their divisions. They are looking to see if they should introduce new technology that will add $150,000 in operating income for each division while adding $1,000,000 in new investments that the two divisions will split evenly. They have also told you that their current hurdle rate is 13%. Residual Income Comparison $100,000 $50,000 $0 Pants ROI Comparison 20.0% 15.0% 10.0% 5.0% 0.0% +ableau Required: Residual Income Pants Shirts Pants ROI ROI w/ New Tech ROI Residual Income w/ New Tech Shirts ← Shirts Division Pants Shirts ROI w/ New Tech Ко 回 1-a. Input each division's return on investment (ROI) and residual income for last year (before implementing the new technology). 1-b. Determine which manager seems to be performing better before implementing the new technology. 2. Input each division's return on investment (ROI) and residual income for last year (after implementing the new technology). 3. Determine whether each manager will support the investment.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Gately Clothiers have provided you with the below dashboard demonstrating the performance for two of their divisions. They are looking to see if they should introduce new technology that will add $150,000 in operating income for each division while adding $1,000,000 in new investments that the two divisions will split evenly. They have also told you that their current hurdle rate is 13%. Residual Income Comparison $100,000 $50,000 $0 Pants ROI Comparison 20.0% 15.0% 10.0% 5.0% 0.0% +ableau Required: Residual Income Pants Shirts Pants ROI ROI w/ New Tech ROI Residual Income w/ New Tech Shirts ← Shirts Division Pants Shirts ROI w/ New Tech Ко 回 1-a. Input each division's return on investment (ROI) and residual income for last year (before implementing the new technology). 1-b. Determine which manager seems to be performing better before implementing the new technology. 2. Input each division's return on investment (ROI) and residual income for last year (after implementing the new technology). 3. Determine whether each manager will support the investment.
Transcribed Image Text:Gately Clothiers have provided you with the below dashboard demonstrating the performance for two of their divisions. They are looking to see if they should introduce new technology that will add $150,000 in operating income for each division while adding $1,000,000 in new investments that the two divisions will split evenly. They have also told you that their current hurdle rate is 13%. Residual Income Comparison $100,000 $50,000 $0 Pants ROI Comparison 20.0% 15.0% 10.0% 5.0% 0.0% +ableau Required: Residual Income Pants Shirts Pants ROI ROI w/ New Tech ROI Residual Income w/ New Tech Shirts ← Shirts Division Pants Shirts ROI w/ New Tech Ко 回 1-a. Input each division's return on investment (ROI) and residual income for last year (before implementing the new technology). 1-b. Determine which manager seems to be performing better before implementing the new technology. 2. Input each division's return on investment (ROI) and residual income for last year (after implementing the new technology). 3. Determine whether each manager will support the investment.
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