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 %
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 4BE: Profit margin, investment turnover, and ROI Briggs Company has operating income of 36,000, invested...
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