Register
Terra Company has two divisions, the Retail Division and the Wholesale Division. The following information was gathered for the two divisions for the current year: Retail Division Wholesale Division Operating
259,851 views
31 votes
31 votes
Terra Company has two divisions, the Retail Division and the Wholesale Division. The following information was gathered for the two divisions for the current year: Retail Division Wholesale Division Operating income $ 2,510,000 $ 6,010,000 Operating assets $ 16,100,000 $ 36,100,000 Terra Company has set a target return on investment (ROI) of 14% for both divisions. Based on ROI, which division appears to have performed better

User Little Helper
by
2.6k points

1 Answer

19 votes
19 votes

Answer:

Wholesale Division

Step-by-step explanation:

ROI = Divisional Profit Contribution ÷ Assets employed in the division

therefore,

Retail Division (ROI) = $ 2,510,000 ÷ $ 16,100,000

= 0.15.6 or 15.60 %

and

Wholesale Division (ROI) = $ 6,010,000 ÷ $ 36,100,000

= 0.16.6 or 16.60 %

Conclusion :

Wholesale Division appears to have performed better

User Jfrey
by
2.9k points
Ask a Question
Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.

1.6m questions

2.0m answers

Other Questions

If the rate of inflation in Japan dramatically increases while the rate of inflation in the United States remains constant, then a. the demand curve for dollars shifts to the left. b. the demand curve
Kylie is risk averse and has $1,000 with which to make a financial investment. She has three options. Option A is a risk-free government bond that pays 5 percent interest each year for two years. Option
From the standpoint of the issuing company, a disadvantage of using bonds as a means of long-term financing is that Group of answer choices bond interest is deductible for tax purposes. interest must be
In January of the current year, Dora made a gift of stock to her granddaughter. At the time of the gift, the stock was worth $15,000. Several months later in the same year after the gift, a $500 dividend
Which of the following goods is directly counted in GDP? 2) A) the lettuce that Subway purchases for its sandwiches B) a 12-inch Subway sandwich purchased by a student C) the bread that Subway purchases
Link Copied!