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Warren Company has two divisions with the following results: Sales revenue Ashland $ 447,000 $ 267,000 Erie $1,170,000 $ 847,000 Divisional expenses Segment income $ 180,000 $ 347,000 $3,970,000 Average invested assets $1,170,000 Warren Company has a hurdle rate of 11.7%. a. Calculate the return on investment for each division. (Round your answers to 2 decimal places.) Return on investment Ashland % Erie % b. Break each division's return on investment down into its component parts using the DuPont method. (Round your profit mar decimal places and investment turnover to 3 decimal places.) Investment Profit margin Turnover Ashland %

Warren Company has two divisions with the following results: Sales revenue Ashland $ 447,000 $ 267,000 Erie $1,170,000 $ 847,000 Divisional expenses Segment income $ 180,000 $ 347,000 $3,970,000 Average invested assets $1,170,000 Warren Company has a hurdle rate of 11.7%. a. Calculate the return on investment for each division. (Round your answers to 2 decimal places.) Return on investment Ashland % Erie % b. Break each division's return on investment down into its component parts using the DuPont method. (Round your profit mar decimal places and investment turnover to 3 decimal places.) Investment Profit margin Turnover Ashland %

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Warren Company has two divisions with the following results: Sales revenue Ashland $ 447,000 267,000 Erie $1,170,000 $ 847,000 Divisional expenses Segment income $ 180,000 $ 347,000 $3,970,000 Average invested assets $1,170,000 Warren Company has a hurdle rate of 11.7%. a. Calculate the return on investment for each division. (Round your answers to 2 decimal places.) Return on investment Ashland % Erie % b. Break each division's return on investment down into its component parts using the DuPont method. (Round your profit margin to 2 decimal places and investment turnover to 3 decimal places.) Profit margin Investment Turnover % Ashland Erie %
Transcribed Image Text:Warren Company has two divisions with the following results: Sales revenue Ashland $ 447,000 267,000 Erie $1,170,000 $ 847,000 Divisional expenses Segment income $ 180,000 $ 347,000 $3,970,000 Average invested assets $1,170,000 Warren Company has a hurdle rate of 11.7%. a. Calculate the return on investment for each division. (Round your answers to 2 decimal places.) Return on investment Ashland % Erie % b. Break each division's return on investment down into its component parts using the DuPont method. (Round your profit margin to 2 decimal places and investment turnover to 3 decimal places.) Profit margin Investment Turnover % Ashland Erie %
c. Calculate the residual income for each division. (Negative amounts should be indicated by a minus sign.) Residual Income Ashland Erie 2 B
Transcribed Image Text:c. Calculate the residual income for each division. (Negative amounts should be indicated by a minus sign.) Residual Income Ashland Erie 2 B
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