Solved

Batman Abstract Company Has Three Divisions That Operate Autonomously The Company's Desired Rate of Return Is 20

Question 77

Essay

Batman Abstract Company has three divisions that operate autonomously.Their results for 2017 are as follows:
 Riddler  Joker  Penguin  Sales $5000000$7000000$10000000 Contribution margin 144000017000003500000 Operating profit 100000017500002520000 Investment base 90000001000000014000000\begin{array} { | l | r | r | r | } \hline &{ \text { Riddler } } & { \text { Joker } } & { \text { Penguin } } \\\hline \text { Sales } & \$ 5000000 & \$ 7000000 & \$ 10000000 \\\hline \text { Contribution margin } & 1440000 & 1700000 & 3500000 \\\hline \text { Operating profit } & 1000000 & 1750000 & 2520000 \\\hline \text { Investment base } & 9000000 & 10000000 & 14000000 \\\hline\end{array}
The company's desired rate of return is 20%.
Required:
a.Calculate each division's ROI.
b.Calculate each division's residual income.
c.Rank each division by both ROI and residual income.
d.Which division had the best performance in 2017? Why?
_____________________________________________________________________________________________
_____________________________________________________________________________________________

Correct Answer:

verifed

Verified

a. \[ \begin{array} { l l l }
\text { Ri ...

View Answer

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Unlock this Answer For Free Now!

View this answer and more for free by performing one of the following actions

qr-code

Scan the QR code to install the App and get 2 free unlocks

upload documents

Unlock quizzes for free by uploading documents