
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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K22.

Transcribed Image Text:(b)
The parts of this question must be completed in order. This part will be available when you complete the part above
(c)
The parts of this question must be completed in order. This part will be available when you complete the part above

Transcribed Image Text:It is the end of the third quarter, and Margaret is evaluating the performance of two key divisions in the company. Both divisions had
$54,000 cash available for investment in the fourth quarter, so Margaret is now analyzing each division before a potential investment.
She has gathered the following condensed income statements and selected information from the balance sheet for each division. The
company's minimum required rate of return is 10%, while its weighted average cost of capital is 9%. Its effective tax rate is 25%
Sales
COGS
Gross margin
Operating expenses
Operating income
Ch 17: Homewor
Operating assets
Total assets
ow Transcribed Text
Question 5 of 10
(a)
ROI
RI
EVA
$
East
$
$830,000
440,000
$390,000
344,000
$46,000
$800,000
$1.100,000
West
Calculate the current ROI, RI, and EVA for each division through the third quarter. For ROI purposes, operating assets are
considered investments. (Enter ROI as a decimal, not as a percentage. Round ROI to 4 decimal places, e.g. 0.1526. Enter negative
amounts with either a-sign e.g.-15,000 or in parenthesis e.g. (15,000).)
East
$1,300,000
760,000
$540,000
494,000
$46,000
$500,000
$740,000
$54.000
$
$
52°F
West
A
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