Complete this question by entering your answers in the tabs below. Req A1 Req A2 to D Req G1 Req G2 to G4 Calculate the ROI for each division. (Round your answers to 1 decimal place. (i.e., 0.234 should be entered as 23.4).) ROI Printer Division % Copier Division Fax Division < Req A1 Req A2 to D >

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Complete this question by entering your answers in the tabs below.
Reg A1
Req A2 to D
Req G1
Reg G2 to G4
Calculate the ROI for each division. (Round your answers to 1 decimal place. (i.e., 0.234 should be entered as 23.4).)
ROI
Printer Division
%
Copier Division
%
Fax Division
%
< Req A1
Req A2 to D >
Transcribed Image Text:Complete this question by entering your answers in the tabs below. Reg A1 Req A2 to D Req G1 Reg G2 to G4 Calculate the ROI for each division. (Round your answers to 1 decimal place. (i.e., 0.234 should be entered as 23.4).) ROI Printer Division % Copier Division % Fax Division % < Req A1 Req A2 to D >
Altoona Technologies, Inc. (ATI) has three divisions. ATI has a desired rate of return of 12.5 percent. The operating assets and income
for each division are as follows:
Operating
Operating
Divisions
Assets
Income
$ 96,000
90,000
Printer
$
540,000
810,000
360,000
Сopier
Fax
54,000
Total
$1,710,000
$240,000
ATI headquarters has $120,000 of additional cash to invest in one of its divisions. The division managers have identified investment
opportunities that are expected to yield the following ROls:
Expected ROIS for
Divisions
Additional Investments
Printer
14.0%
Сopier
13.0%
Fax
12.0%
Required
a-1. Calculate the ROI for each division.
a-2. Which division manager is currently producing the highest ROI?
b. Based on ROI, which division manager would be most eager to accept the $120,000 of investment funds?
c. Based on ROI, which division manager would be least likely to accept the $120,000 of investment funds?
d. Which division offers the best investment opportunity for ATI?
g. Calculate the residual income:
(1) At the corporate (headquarters) level before the additional investment.
(2) At the division level before the additional investment.
(3) At the investment level.
(4) At the division level after the additional investment.
Transcribed Image Text:Altoona Technologies, Inc. (ATI) has three divisions. ATI has a desired rate of return of 12.5 percent. The operating assets and income for each division are as follows: Operating Operating Divisions Assets Income $ 96,000 90,000 Printer $ 540,000 810,000 360,000 Сopier Fax 54,000 Total $1,710,000 $240,000 ATI headquarters has $120,000 of additional cash to invest in one of its divisions. The division managers have identified investment opportunities that are expected to yield the following ROls: Expected ROIS for Divisions Additional Investments Printer 14.0% Сopier 13.0% Fax 12.0% Required a-1. Calculate the ROI for each division. a-2. Which division manager is currently producing the highest ROI? b. Based on ROI, which division manager would be most eager to accept the $120,000 of investment funds? c. Based on ROI, which division manager would be least likely to accept the $120,000 of investment funds? d. Which division offers the best investment opportunity for ATI? g. Calculate the residual income: (1) At the corporate (headquarters) level before the additional investment. (2) At the division level before the additional investment. (3) At the investment level. (4) At the division level after the additional investment.
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