Luke Company has three divisions: Peak, View, and Grand. The company has a hurdle rate of 5.76 percent. Selected operating data for the three divisions follow: Sales revenue Cost of goods sold Miscellaneous operating expenses Average invested assets Required: 1. Compute the return on investment for each division. 2. Compute the residual income for each division. Complete this question by entering your answers in the tabs below. Peak $ 329,000 196,000 45,000 1,220,000 Return on Investment View View $ 222,000 109,000 35,000 950,000 Required 1 Required 2 Compute the return on investment for each division. Note: Enter your ROI answers as a percentage rounded to two decimal places, (.e., 0.1234 should be entered as 12.34%.) Peak Grand Grand $ 310,000 199,000 40,000 1,115,000

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Chapter1: Financial Statements And Business Decisions
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Luke Company has three divisions: Peak, View, and Grand. The company has a hurdle rate of 5.76 percent. Selected operating data for
the three divisions follow:
Sales revenue
Cost of goods sold
Miscellaneous operating expenses
Average invested assets
Required:
1. Compute the return on investment for each division.
2. Compute the residual income for each division.
Required 1 Required 2
Complete this question by entering your answers in the tabs below.
Peak
$ 329,000
196,000
45,000
1,220,000
Retum on Investment
View
Compute the return on investment for each division.
Note: Enter your ROI answers as a percentage rounded to two decimal places, (l.e., 0.1234 should be entered as 12.34%.)
Peak
Grand
%
View
$ 222,000
109,000
35,000
950,000
Required 1
%
Grand.
$ 310,000
199,000
40,000
1,115,000
Required 2 >
Transcribed Image Text:S Luke Company has three divisions: Peak, View, and Grand. The company has a hurdle rate of 5.76 percent. Selected operating data for the three divisions follow: Sales revenue Cost of goods sold Miscellaneous operating expenses Average invested assets Required: 1. Compute the return on investment for each division. 2. Compute the residual income for each division. Required 1 Required 2 Complete this question by entering your answers in the tabs below. Peak $ 329,000 196,000 45,000 1,220,000 Retum on Investment View Compute the return on investment for each division. Note: Enter your ROI answers as a percentage rounded to two decimal places, (l.e., 0.1234 should be entered as 12.34%.) Peak Grand % View $ 222,000 109,000 35,000 950,000 Required 1 % Grand. $ 310,000 199,000 40,000 1,115,000 Required 2 >
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