What is the divisional ROI to the nearest % point? (1 d.p.)

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Pro is a division of Mo and is an investment centre. The head office controls finance, HR
and IT expenditure but all other decisions are devolved to the local centres.
The statement of financial position for Pro shows net value of all assets and liabilities to be
$4,500m at the start of the year and $4,890m at the end. It carries no debt itself although
the group has debt liabilities.
The management accounts for income read as follows:
Revenue
3,500
Cost of sales
1,800
Local administration
250
IT costs
50
Distribution
80
Central administration
30
Interest charges
90
Net profit
1,200
Ignore taxation.
What is the divisional ROI to the nearest % point? (1 d.p.)
Transcribed Image Text:Pro is a division of Mo and is an investment centre. The head office controls finance, HR and IT expenditure but all other decisions are devolved to the local centres. The statement of financial position for Pro shows net value of all assets and liabilities to be $4,500m at the start of the year and $4,890m at the end. It carries no debt itself although the group has debt liabilities. The management accounts for income read as follows: Revenue 3,500 Cost of sales 1,800 Local administration 250 IT costs 50 Distribution 80 Central administration 30 Interest charges 90 Net profit 1,200 Ignore taxation. What is the divisional ROI to the nearest % point? (1 d.p.)
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