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28 Sep 2019
Simple ROI and Economic Profit Calculations
Consider the following data:
X Y Z Invested Capital $1,040,000 ____ $1,260,000 Income _____ $79,200 $132,300 Revenue $2,392,000 $2,640,000 _______ Return on Sales 4% ____% _____% Capital Turnover _____ _____ 3.5 Rate of Return on invested capital ____% 6% _____%
1. Prepare a similar tabular presentation, filling in allblanks
2. Suppose each division is assessed a capital charge based on acost of capital of 10% of invested capital. Compute the economicprofit for each division.
Begin by selecting the formula and then enter the amounts in theformula and calculate the economic profit or loss for eachdivision.
3. Which division is the best performer? Explain.
Simple ROI and Economic Profit Calculations
Consider the following data:
| X | Y | Z | |
| Invested Capital | $1,040,000 | ____ | $1,260,000 |
| Income | _____ | $79,200 | $132,300 |
| Revenue | $2,392,000 | $2,640,000 | _______ |
| Return on Sales | 4% | ____% | _____% |
| Capital Turnover | _____ | _____ | 3.5 |
| Rate of Return on invested capital | ____% | 6% | _____% |
1. Prepare a similar tabular presentation, filling in allblanks
2. Suppose each division is assessed a capital charge based on acost of capital of 10% of invested capital. Compute the economicprofit for each division.
Begin by selecting the formula and then enter the amounts in theformula and calculate the economic profit or loss for eachdivision.
3. Which division is the best performer? Explain.
Bunny GreenfelderLv2
28 Sep 2019