2 Houghton Chemicals, which started operations one year ago, has two divisions: Alloys and Petro. Both divisions invest heavily in R&D,which is assumed to generate benefits for five years. R&D spending is made uniformly throughout the year. Houghton Chemicals has acost of capital of 11 percent. Selected financial information for the two divisions (in thousands of dollars) for the year just completedfollows:Sales revenueDivisional incomeDivisional investmentCurrent liabilitiesR&DAlloys$ 8,9009277,050310350ROI of Alloys divisionROI of Petro divisionWhich division performed better?Petro$ 7,0001,0958,500350450Required:Evaluate the performance of the two divisions assuming Houghton uses return on investment (ROI).Note: Enter your answers as a percentage rounded to 2 decimal places (i.e., 32.13).%%

An investment's profitability and efficiency in relation to its cost are assessed using the…

Houghton Chemicals, which started operations one year ago, has two divisions: Alloys which is assumed to generate benefits for five years. R&D spending is made uniformly cost of capital of 11 percent. Selected financial information for the two divisions (in thou follows: Sales revenue Divisional incone Divisional investment Current liabilities R&D Alloys $ 8,900 927 7,050 310 350 Petro $ 7,000 1,095 8,500 350 450

Houghton Chemicals, which started operations one year ago, has two divisions: Alloys which is assumed to generate benefits for five years. R&D spending is made uniformly cost of capital of 11 percent. Selected financial information for the two divisions (in thou follows: Sales revenue Divisional incone Divisional investment Current liabilities R&D Alloys $ 8,900 927 7,050 310 350 Petro $ 7,000 1,095 8,500 350 450

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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