Required information
Use the following information for the Problems below:
The following data pertain to three divisions of Nevada Aggregates, Incorporated. The company's required rate of return
on invested capital is 8 percent.
Division A
Division B
Division C
Sales revenue
?
$ 11,000,000
?
Income
$ 540,000
$ 2,040,000
?
Average investment
?
$ 2,550,000
?
Sales margin
20%
?
25%
Capital turnover
?
?
?
ROI
?
?
40%
Residual income
?
?
$ 124,000
Required:
The following data pertain to three divisions of Nevada Aggregates, Incorporated. The company's required rate of return on invested
capital is 10 percent.
Note: Round "Capital turnover" answers to 2 decimal places.
Division A
Division B
Division C
Sales revenue
$ 7,500,000
$ 40,100,000
Income
$ 1,650,000
$ 8,822,000
Average investment
$ 10,025,000
Sales margin
22%
%
25%
Capital turnover
1.00
ROI
%
%
22%
Residual income
$ 450,000