Just need the answer to the last part. Thanks!Please don't provide solutions image based thnx Wescott Company has three divisions: A, B, and C. The company has a hurdle rate of 8 percent. Selected operating data for the threedivisions are as follows:Sales revenueCost of goods soldMiscellaneous operating expensesInterest and taxesAverage invested assetsRequired:1. Compute the ROI for each division.2. Compute the residual income for each division.3. Rank the divisions according to the ROI and residual income of each.4-a. Compute the return on investment on the proposed expansion project.4-b. Is this an acceptable project?Wescott is considering an expansion project in the upcoming year that will cost $6.2 million and return $554,000 per year. The projectwould be implemented by only one of the three divisions.Complete this question by entering your answers in the tabs below.Req 15. Without any additional calculations, state whether the proposed project would increase or decrease each division's ROI.6. Compute the new ROI and residual income for each division if the project was implemented within that division.Req 2Division ADivision BDivision CDivision A$ 1,305,000806,00074,00058,00010,030,000ROIReq 3%%%Req 4AResidualIncome (Loss)Division B$ 1,110,000815,00062,00051,0002,400,000Req 4BReq 5Compute the new ROI and residual income for each division if the project was implemented within that division.Note: Loss amounts should be entered with a minus sign. Enter your ROI percentage answers to 2 decimal places, (i.e.,0.1234 should be entered as 12.34%.). Enter your answers in whole dollars not in millions.Division C$ 1,118,000812,00063,00051,0003,947,000Req 6

Residual Income is used to assess the economic value added by an investment or business unit. If the…

Wescott Company has three divisions: A, B, and C. The company has a hurdle rate of 8 percent. Selected operating data for the three divisions are as follows: Sales revenue Cost of goods sold Miscellaneous operating expenses Interest and taxes Average invested assets Division A $ 1,305,000 806,000 74,000 58,000 10,030,000 Required: 1. Compute the ROI for each division. 2. Compute the residual income for each division. Division B $ 1,110,000 815,000 62,000 51,000 2,400,000 Wescott is considering an expansion project in the upcoming year that will cost $6.2 million and return $554,000 per year. The project would be implemented by only one of the three divisions. 3. Rank the divisions according to the ROI and residual income of each. 4-a. Compute the return on investment on the proposed expansion project. 4-b. Is this an acceptable project? Division C $ 1,118,000 812,000 63,000 51,000 3,947,000 5. Without any additional calculations, state whether the proposed project would increase or decrease each division's ROI. 6. Compute the new ROI and residual income for each division if the project was implemented within that division.

Wescott Company has three divisions: A, B, and C. The company has a hurdle rate of 8 percent. Selected operating data for the three divisions are as follows: Sales revenue Cost of goods sold Miscellaneous operating expenses Interest and taxes Average invested assets Division A $ 1,305,000 806,000 74,000 58,000 10,030,000 Required: 1. Compute the ROI for each division. 2. Compute the residual income for each division. Division B $ 1,110,000 815,000 62,000 51,000 2,400,000 Wescott is considering an expansion project in the upcoming year that will cost $6.2 million and return $554,000 per year. The project would be implemented by only one of the three divisions. 3. Rank the divisions according to the ROI and residual income of each. 4-a. Compute the return on investment on the proposed expansion project. 4-b. Is this an acceptable project? Division C $ 1,118,000 812,000 63,000 51,000 3,947,000 5. Without any additional calculations, state whether the proposed project would increase or decrease each division's ROI. 6. Compute the new ROI and residual income for each division if the project was implemented within that division.

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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