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The Following Information Is Available About the Charger Division of Weston

Question 112

Essay

The following information is available about the Charger Division of Weston Company. Weston requires a return of 8% from all divisions.
 Charger Division Earnings from Operations $12,854,000 Charger Division Sales $92,500,000 Charger Division Identifiable Assets $156,000,000\begin{array}{lrr}\text { Charger Division Earnings from Operations } & \$ & 12,854,000 \\\text { Charger Division Sales } & \$ & 92,500,000 \\\text { Charger Division Identifiable Assets } & \$ & 156,000,000\end{array}

Required:
a. Compute the ROI for the Charger Division.
b. Compute the residual income for the Charger Division.

Correct Answer:

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a. ROI = $12,854,000...

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